If you find something really difficult to implement in your financial life, chances are that you will not do it. This is exactly the case when it comes to saving your hard-earned money. The key point to remember is that all of us know that we need to save our money, but we more often than not tend to make it difficult for ourselves to do it.
Here are 4 easy tips for saving your money that we have outlined for you:
Have clear financial goals
It is very important to know what you are saving your money for. If you do not have financial targets, how do you know that you need to save for achieving those targets? Ask yourself the following three questions – How much do you need? By when? How much you need to set aside every month to achieve your targeted savings?
Have SMART financial goals
Your goals must be SMART – Specific, Measureable, Attainable, Relevent, Timely. By doing this, you just create a blueprint in your mind, which tells you clearly how much you need to be saving every month to achieve your financial goals.
The traditional way of doing your savings is – your money comes in, you take care of your monthly bills, spend your money, and decide the portion you want to save at the end. However, truth of the matter is that by the time the month ends, you are hardly left with anything. Therefore, instead of making things difficult for yourself, simply adopt an automated approach for savings. Automate the way your money would go to pay your bills, decide how your money would go into your savings, and only then decide on how you spend your money that is left over. The best way you can automate your savings is by enrolling for a monthly mutual fund SIP.
This way, you would take all the emotions out of it and your savings will happen automatically in a much more planned manner.
Calculate the cost of your time
It is very important for you to know and determine how much your time is worth. For instance, you are in a job and draw Rs.125 per hour (Rs.30,000 Per Month). You visit Shoppers Stop during the weekend and see your favourite Nike Jogger Shoes for Rs.3000. The call that you need to take here is whether it is worth working for 18 hours to spend that much on your shoes. If you honestly say yes to it, then buy, else do not. This clearly helps you distinguish between needs and wants.
It is not as difficult to save your hard-earned money as you make it to be. It is all about getting into good investment habits.
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.