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Six tips that can help you to save money
Many individuals find it difficult to save money despite good salary. Here are some tips that can help them save money.

Frequently I get calls from indiviudals asking this question- How should I save money? Many of them started with a lucrative career but after a while they find it difficult to generate enough surplus from their income. Different reasons can be attributed to it- a sudden increase in debt, high lifestyle, insufficient increase in salaries etc.. Whatever be the scenario, it's always important that one keeps generating a healthy savings to have enough money to cater to future requirements.

1.Know what’s coming in and what’s going out

It is necessary that you should know what you are earning. There is a difference between the salary package and the net income in your hand. You need to pay taxes on the income you receive. You have to plan your expenses and future with money that you get after paying taxes on your income. For salaried employees, tax payment is done by employers but you may still have to pay tax when you file your income tax returns. Do a detailed analysis and find out how much money you will really get in your hand. Once you know your right income, it pays to understand your outflows too. If your spending behavior is your main concern then analyze your bills. This will help you to know where you are overspending. It can be your outings or impulsive buying which might be forming a major chunk of these. It may also be high debt which you availed with expectation of increase in salary which never happened. Whatever be the cause find ways to curtail your overspending. If your cash outflows are high due to debt repayment then prepare a strategy to reduce your interest burden so that you can have more savings in your hand.

2.Stick to your budget

Once you know where your money goes and how much money you have, budgeting becomes essential. It helps to keep track of your money matters. It gives a very good picture of what’s happening with your cash flows and why. When you are at initial stages of your career this excerscise may look too boring. Even if so, make it a point to prepare a budget. By making a budget you will do good in restraining yourselves from spending on items which you may want but are not needed today. You also get a glimpse of the surplus you are going to generate in next few months- provided you stick to your budget.

3.Separate your savings account

Savings will not be there unless you accumulate some money. Make it a practice of letting your savings go into a specific bank account from where you can invest them. As we say ‘Pay Yourself First’, this savings first need to be in practice to actually save money. You can divide your expense and savings account so that both do not get mixed up and you know clerly what you are saving.

4.How can you earn more?

Many times, your job growth is not decent enough to take care of rising expenses. But changing of job or a career is easier said than done. Identify, if there can be earning opportunities along with your job which can help you to increase your income. Part time teaching, consultancy assignments can become a good source of your extra earnings.

5.Ressist impuslive buying

Youngsters fall prey to the advertisements offering big discounts. Impulsive buying is spending money on items which you have not planned to buy. If one goes on spending on things he does not need in a reckless way, there is a high chance of he landing in debts. Better plan what you want to buy and prepare a plan to fund that purchase. This will help you resisting impulsive buying and save for a brighter tomorrow.

6.Avoid credit to satisfy ‘wants’

If you are borrowing to pay for your ‘wants’ and not needs, better to avoid such borrowings. If you avail a personal loan to go for a long vacation overseas, you not only have to repay the money borrowed but also have to pay heavy interest on it, which further reduces possibility of saving money. Instead if you take a short holiday in India, you may end up saving some money.

To make savings a habit, it is necessary to remember below points:
  • Plan for all purchases.
  • Know what you need and what you want. Wants are the things which brings overspending in your finances.
  • While buying things try to negotiate. What is available in a mall may be available at an old shopping market but at a redcued cost. No harm in going there.
  • Fix timewise target for savings and follow it rigorously. Maintain a minimum saving rate of 10%- higher the better.
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