8 Sensible Ways To Save More Money
Keep track of your expenses
It is important to make a list of all major expenses to know where your money is going. List all your expenses in a daily diary or better still, use an app to manage household expenses.
Prepare a budget
The next step to learning how to save money is to plan your spending. Making and sticking to a budget teaches you how to manage your expenses. To stay within the budget you have set, plan when, where and how much you will spend.
Cut down on expenses
If you want to save more money, you need to know how to control personal expenses. While you cannot cut down much on regular expenses, you can cut down on impulse buys or lifestyle expenses. For example, you can try to reduce the number of times you eat out in a month or cut down on entertainment expenses.
Set saving goals
If you want to save more, it is important to know how to plan future savings. List down your short-term and long-term goals. Use a financial goal planning calculator to figure out how much you need to save every month to achieve those goals.
Pick your priorities
Since resources are limited, you need to prioritise how to put your savings to the best use. While short term goals, like buying a car, are important, do also put long term goals like investment planning for retirement on your list of priorities.
Choose the right investments
While you can use debt products like fixed deposits and debt mutual funds to invest, for your money to grow, it may be ideal to invest in equity. One way of investing in equity is to invest directly in stocks. You can also start systematic investment plans (SIP) in equity mutual funds. However, both debt and equity mutual fund investments involve market risk, so choose according to your risk profile.
Automate your savings
To build wealth, you need to first save and then invest. It is recommended that you set up a direct debit from your bank account for your SIP investments. This way, it is ensured that you are saving and investing in a disciplined manner.
Keep track
Review your budget and savings regularly and try to fix any gaps or areas that need improvement. With proper planning and discipline, you can eventually manage your expenses and save more.
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