Written by Ashwin Dewan and published on 26 May 2021.
Save money often finds its way into most New Year resolution lists. That it is often not fruitful is entirely a different matter. Fret not! Here are some smart ways to get you going
The Christmas and New Year holiday season is always a time for joyful reunions, celebrations and, of course, a lot of spending. Be it buying new things, shopping for gifts or the annual vacation, money just flows out.
But in reality, this spending spree might hurt a bit, sometime down the year, when there is a shortage of funds for an important expenditure. That's when you realize you could have been a little careful in your money management.
So, here's the time to face the year ahead and re-evaluate some of your spending choices. The New Year provides you with the perfect opportunity to make a resolution of Save money.
There are so many ways to save money, not just during the holiday time, but throughout the year. Here are some valuable tips that can help you manage your money.
1. Get your debt out
You can't really move forward in life if you are weighed down by debt. The road to financial freedom is not an easy one, but it is attainable with a bit of careful planning, restraint and discipline. Once you have your debt under control, it's time to start putting some money aside for that holiday you deserve or the new car you want to buy.
2. Rethink your mobile phone plan
Though this may seem trivial, it can result in big savings. Are you using what you are paying for? Talk time and SMS charges are two money extractors by mobile phone services companies. Try to switch to a plan that is right for your talk time usage, and does not make you pay for services that you don't need. Every single rupee counts!
There are a few points to keep in mind while choosing a mobile plan
So, with unlimited calls, you can call your friends, relatives and colleagues without having to worry about exhausting your talk time. But do you need that kind of talk time? Further, there are plans that cover a month, two months and even three months. The price of the package increases with the number of months.
Take one that offers a roaming facility. This way, you do not have to worry about running around looking for a roaming pack, while you visit another city.
Most operators offer flexible data packs. If you are someone who uses a lot of data to check emails or surf the Net, go for an appropriate pack. If you do not use as much data, go for a minimum data usage pack.
There is no use going for a pack that offers unlimited data usage per day for a certain cost when all you do is use it minimally to check your emails.
"I realized I was paying extra for services I did not use on my mobile phone. Getting rid of these services helped me save money that was being wasted needlessly", says Catherine DeQuadros, a senior copy supervisor from Bangalore
3. Avoid high insurance coverage for new gadgets
Today, expensive and high-end gadgets and appliances such as the television, fridge, mobile phone, laptop and tablet are a part and parcel of our households. They cost a lot of money. In the rare event that a television screen breaks or the mobile phone gets damaged because water spilt on it, insurance comes in handy to make up for the loss.
However, the problem arises when you go for expensive insurance coverage, assuming it is the best option. Do remember to cross-check the different insurance options available, as sometimes, you can get the same benefits from a more affordable insurance cover. Unnecessary spend on high insurance coverage is not required.
4. Try carpool or use public transport
Commuting to and from the office can be back-breaking on your well-being as well as your savings, more so if you live far away from your workplace. Especially, taking a cab to work and back might put a serious dent on your savings.
Instead, try carpool, or even public transport for that matter. It might get tedious and slow, especially with the latter option, but you will be saving a major chunk of your salary, which you can put aside for a rainy day or a special holiday getaway. Further, bus and metro train services are becoming more and more comfortable nowadays, which can not only make the journey pleasant but also be far less expensive compared to a cab.
5. Plan vacations in advance
Again, another no-brainer! Taking a break from mundane routines and going on a holiday trip is important for you to recharge and rejuvenate. Today, with so many convenient options, be it online or through travel agents, travelling within the country or abroad has become very easy. However, if you can plan ahead, zero in on the dates of your travel and book your tickets and accommodation way in advance it can save you a considerable amount of money. Last-minute bookings make you shell out a few thousands more than what you would have otherwise spent. Also, watch out for some great discounts and irresistible deals by browsing through the different ticketing sites regularly.
6. Buy only what you need
Buy what you need, not what you fancy! Remember, there is a difference between want and need. While some things such as groceries, toiletries and clothes are absolute necessities, other things like the latest Bluetooth speakers and the latest health-tracking watch are not really required. The same applies to children as well. They should learn to ask for or buy things such as toys, stationery and chocolate only when they require them or occasionally, and not overindulge in them. This can help save money, in the long run. When children watch and observe your wise practices, they will also inculcate money-saving habits in their lives.
7. Set up a savings account
Once you get your salary, transfer a large amount of it into your savings account and retain a good-enough amount that will help you address your other expenses. This is an extremely efficient way to save money, as you will not be tempted to waste money when you see a small number as your bank balance. Open a savings account for your child too and explain to him the importance of saving money. From time to time, your child may receive cash gifts from relatives. Take them as opportunities for teaching moments and deposit the cash into your child's account. Let him be a part of the entire process and see how it is done.
8. Try to limit or avoid credit cards:
Today, with almost every other product coming under equated monthly instalment (EMI) schemes, the usage of credit cards has increased. EMIs may be enticing since only a small amount is deducted every month, but you should understand that at the end of it all, you pay an unnecessary high interest for this service. Instead, you can try and learn to live within your means.
If you are already a credit card holder, do not purchase any more unless you pay off your current balance. Try also not to keep your credit card in your wallet, as this will only tempt you to use for every purchase.
9. Quit your bad habits:
Often, unhealthy habits such as smoking and drinking end up hurting your wallet, really bad. The compelling addiction to buying cigarettes and alcohol frequently, combined with the rising prices of these products, only serves to dent your savings. Slowly but steadily, try to cut down on this and give up totally in due time. This way, not only will you contribute towards a healthier living but also help save money.
10. Conserve energy:
By conserving energy at home, you can considerably reduce the electricity bills too. To begin with, switch off lights, fans, television and other electrical appliances when not in use. Choose compact fluorescent light bulbs (CFLs) and light emitting diode (LED) bulbs to brighten up your homes, as these types use less energy compared to the traditional incandescent bulbs. When buying new home appliances such as televisions, refrigerators and air conditioners, look out for the star rating given by the Bureau of Energy Efficiency (BEE) for that device. More the stars on a scale of 1 to 5, the less energy the appliance will consume. Over and beyond saving money, you are also doing your bit for the environment and contributing to eco-friendly measures.
Another way of saving money is to make careful investments that will bring you considerable returns. Remember to invest wisely.
When you are ready to start saving or investing your money, go through the pros and cons of every saving scheme that you are interested in. Today, there are different options for saving and investing money such as mutual funds, stocks and shares, and systematic investment plans. Having said this, fixed deposits are still favored by parents for themselves and their children, says Mr. Phurba Sherpa, a manager at the Siliguri branch of the State Bank of India (SBI)
A new year calls for new beginnings. Stop that impulsive shopping, and splurging money on unnecessary things, as they take a heavy toll on your savings.
Start the year by following these useful savings tips and you will be well on your path to financial stability. What's even more better is that your child will learn the importance of saving money from an early age, which will benefit him/her later.
Get saving, and be wise!