Monday, September 20, 2021

How To Save Money Fast-15 Most Innovative Tips That Work

Since childhood, piggy banks have served as a special kind of security for each one of us. Remember how our elders used to say ‘savings is one kind of earning’? The teaching has been certified with the ongoing pandemic led by the COVID-19 outbreak. Life is extremely unpredictable and therefore, how much you save matters more than how much you earn.

Savings is the leftover piece of pie that people set aside after their regular dinner. It contains the amount of your income left after fulfilling your daily expenses. 

Saving money is itself an art and not everybody is good at it. The earlier you start the better results will be. Now, stepping stones can seem a little difficult at the beginning, but everyone needs to make the first move from somewhere. There are plenty of creative ways to save money.  With a concrete plan and smart choices, you will be ready to sail the ship.

ALSO READ: 6 Absolutely essential money management tips for pandemic

Before you start this journey, let us drive you through some knowledge-boosting warm-ups related to different sets of goals and saving tips.

What is the 30 days rule?

The 30-day rule is one of the most effective saving tips you will come across. It says, whenever you are tempted to buy something non-essential, wait for 30 days. If you still wanna buy it a month later, go for it. Otherwise, drop it.

Most of us often find comfort in our habits. We know that it takes 21 days to develop any habit. Therefore, the 30-day rule is practically very helpful.

Saving money is also a habit that can be developed like other good habits. Now let’s get into the deep sea of 30-day rules. So if we break down 30-day saving rules into simple words, it is drawing a margin between what you want and what you need. 

The 30-day rule is a simple trick that develops the power of differentiating the essential need from the want in the human mind. After preventing yourself for 30 days if you still feel you need to have that thing then you should go for it. In case you let it go then it surely falls under the non-essential criteria.

This method helps to save your hard-earn money instead of impulse shopping every now and then. 30-day rules bring discipline to the financial goals. 

So next time if you think you want that dress or headphones, wait for 30 days and see what happens.

How much should I save each month? 

This is the most commonly asked question among employed young adults. How much someone should save each month is directly proportional to what goals they are saving for. Yes, your savings goals majorly depend on your particular short or long-term goals.

For example, if you want to save to buy a PlayStation or for your holiday gifts and dine out then it will be considered as a short-term goal. On the other hand, if you are saving up for your child’s education or buying a car then it will run for less than one decade. Last but not the least, a retirement plan is considered the ultimate long-term savings goal.

According to experts, 20 percent of your income should go into your daily savings. The 20 percent saving method is attested as a decent starting point for savings.

Your saving goals vividly depend on your life goals. If you are saving for emergencies or sudden situations then, 20-30 percent monthly savings can work as a good backup without muddling your budget. For example, if your monthly paycheck is $10,000 then up to $2,000 can go into your monthly savings.

Planning to have an early retirement is a fascinating concept for the young working generation. If your life goal is having an early retirement, in that case, 50 percent of your daily income should go into the monthly savings. If you want to go for a usual retirement there will be no need for 50 percent saving.

ALSO READ: Your 6 Step Guide To 10-Year Retirement Plan

For short-term goals like a family vacation in the Maldives, the savings will be dependent on the cost of the trip and the time you want to go for the trip. 

You need to plan your expenses according to the budgeting method for particular goals like this. However, how much money you should save depends on your lifestyle choices, which may vary from person to person. 

How much of my savings should go into the investment?

Invest according to your lifestyle expenses. Investment is a form of savings that will never go out of fashion, but it does come along with risks and require proper planning. Just like your savings plan, your investment also should be based on your life goals.

Firstly, eliminate the mistake of putting all fruits in one basket. That means you should avoid investing all of your savings in a single investment plan. This strategy cuts down your risk.

Investing one portion of your savings at a time helps the continuous growth of your money.

Creating an expense management plan is the most important step. Don’t plan your savings around your monthly expenditure, the result will lead to having no money for investment if expenses run high in a particular month. If you have a goal of $1000 from your monthly paycheck, then save that $500 as soon as you receive your paycheck. This will help to maintain consistency in your investment goals.

You can invest according to your risk-bearing capacity as well. If you are in your early professional days then it may give you the liberty of taking more risk than usual. This is based on the assumption that your income will grow over time. So you get the time of construction of a risk profile while focusing on the yearly rate of return. 

How To Save Money- 15 Innovative Ways That Work Like Magic

There is no shortcut to success but surely there can be creative ways to have a successful financial plan. Take a look at these creative ways to save money-

1. Differentiate between the want and the need- Spend your money on essentials. Follow the 30-day rule and ask yourself what are the things you need and what are the things you don’t. We have explained the 30-days rule above, give it a read if you missed it.

2. Look for substitutes-  This is a cost-effective method for saving money. Always look for affordable alternatives instead of expensive options. Shop during the sale season and use every discount or rebate reward during traveling.

3. Save energy- Try to minimize your electricity and gas bill as much as you can.

4. DIY- Try to repair possible things in your house on your own. Bringing your lunch to work is also a great way to save money.

5. Budget- It is smart to have a monthly budget. It helps you to keep your expenses on one track. If possible set a daily expenditure limit.

6. Set goals- Give yourself short-term goals. Consider these goals like your cheat day. Reward yourself for saving over a long period of time. This can be going out shopping or on a vacation.

7. Envelop theory- Make separate envelopes for separate amusement like dinner or movies and try to stay in that bracket.

8. Extreme streaming- If you are too busy to watch movies on Netflix or seldom open the music app that you pay a subscription for, cancel them. Cut down on all the useless expenses.

9. Avoid abrupt shopping- Don’t randomly purchase things without knowing their utilization in your life.

10. Take care of yourself- Take care of your health daily to avoid major mishappening. Better safe than sorry. A major health complication can be a curse for your savings as most often, it can cost you thousands of dollars.

11. Recycle and sell- If one man’s trash can be another man’s treasure then why can’t it be your own? Adopt the recycling theory and sell things you don’t use anymore.

12. Cut off beverage bill- Be your barista. Try to brew your coffee instead of Starbucks. Avoid alcohol as much as you can.

13. Avoid debts and loans- Your debts can eat your savings, so if you are in debt or if you have a loan then clear them and plan your necessary future loans.

ALSO READ: Your one-stop guide to debt-consolidation loan

14. Family time- You always don’t need exotic vacations or expensive dine out for spending time with your family. Stay in and enjoy the time together by cooking or binge-watching.

15. Learn from mistakes- Last but not least, look back at your annual spending and check what went wrong. It is nice to have professional advice to shape your financial goals but at the end of the day, you are the one who needs to stay focused on your own goals. 

Brishti Banerjee
Brishti Banerjee is currently pursuing her B.A(Hons) in Media Communications and Advertising from School of Broadcasting & Communication Mumbai. Brishti has years of writing and editing experience for various Advertising Agencies and Media Houses. Brishti believes she has the unique ability to balance creativity and commercial subjects on the same page. Besides writing, she has experience and a keen interest in graphic designing and wants to pursue a masters degree in Advertising. Brishti has the aim of becoming a Creative Director and changing the traditional style of the Advertising world.

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