How to Save Money
Mubin’s Manual has summarized steps to save money from personal experience. Sometimes the hardest thing is the first step to start anything new. The same goes for saving money. This post will help you to save money and develop a simple and realistic strategy. You can consider the below steps for your short term and long term savings goal.
Key skills to save money:
Steps to save money:
1.Record your expenses:
The first step to start saving money is to figure out how much you spend. Keep track of all your expenses. Expenses may be of different types such as Automobile, Entertainment, Utilities, Tax, Travel, etc. These expenses may be made via various modes such as cash, credit, or debit card.
It is difficult to record unless you monitor and use proper means. You can either maintain the Excel Sheet or download the app. I am using the expense manager app for recording expenses. I personally recommend using the app as it is very handy.
2. Budget for saving
Once you have an idea of how much you spend in a month, you can begin to organize your previous expenses into a workable budget. Your budget should outline how your expenses measure up to your income; so you can plan your spending and limit overspending. Mention the factor in expenses that occur regularly but not every month, such as car maintenance.
Aim to save about 10 to 15% of your income.
3. Cut your spending
If your expenses are so high that you cant save 10 to 15 % income, it might be the time to cut your spending. Identify essentials and non-essentials expenses and limit your budget for nonessentials. Entertainment, bulk buy, dining out, etc are nonessentials. Try to save from fixed monthly expenses like television, electricity bill, etc.
Use free resources such as community event listings to find free or low-cost events to reduce entertainment spending. Cancel subscriptions and membership you don’t use. Commit to eat outside once a month. Yes if you set a target of once a month you will eventually achieve it in a few months.
Tip💡 : Save electricity by using AC on automode. Keep temperature range as 26-27℃ .
4. Set saving Goals
To save money you need to set a goal. Once you start following steps 1 to 3, it will be your habit. Considering your existing balance and future aspirations set your goals. For instance, if you are planning to buy a car in a few months, saving for a car will be your goal. Once your goal is set figure out how much money you will need and how long it will take you to save it.
Tip💡 : Unsubscribe marketing mails from electronic shops. Marketing emails encourages you to buy new electronic gadgets.
5. Set your priorities
Your goals are likely to have the high impact on your allocations of savings after expenses and income. Keep long term goals in your mind such as retirement. Do not compromise your long term goals for short term. Learn how to prioritize your saving goals so you have clear idea of where to start saving.
Related Post : Best Budget Phone To Gift In 2020
6. Pick the right tool
If your saving goal is short term consider using fixed deposit scheme. For long term goals invest your money at right place. For an instance look for the famous and trust worthy developer and invest in real estate.
Tip💡 : Learn stock market ,stock markets are subject to risk. Better invest with local developer.
7.Do not buy liabilities
Considering long term goal build assests. Bank over-drafts , account payable, credit card ,loan etc are liabilities . In short asset out money in your pocket and liabilities takes money out. Do not borrow money from anyone as it will develop habit of borrowing.
Tip💡 : Stay away from credit cards and loan. Bank offers 0% interest rate and charges processing fees.
8.Multiply money
Once you are able to manage your financial goals, invest it in the right place. Real estate is a very good option for investment. Hotels, restaurants, cafeteria etc are liabilities. So unless you are financially stable do not invest on it. Look for new projects or undergoing projects for investment. You will have two advantages in new projects: Flexible payment plan and late handover of the property. Later it will be a source of passive income.
That’s all about it from Mubin’s Manual. Do not forget to consider tax, and Zakat. Click here to know more about Zakat. Contact me for investment opportunities in real estate in Mumbai with good ROI.
