A penny here, and a dollar there, placed at interest, goes on accumulating, and in this way the desired result is attained. It requires some training, perhaps, to accomplish this economy, but when once used to it, you will find there is more satisfaction in rational saving than in irrational spending. ~ P.T. Barnum
The money saving secrets from moneychutney.com are simple, easy to implement and will help you make substantial savings. Our focus is on providing tips that make substantial difference and help you save 40-60% and possibly much more. We call these tips secrets. To some of you, these tips may not sound great, but when you implement them, you will see big and long term savings that will change your financial situation.
There are money-saving tips that will help you save 2-5%, but are not enough to make a big impact on your financial situation. Plus, they could take much of your time to implement them – they are not really practical. Such advice make you penny wise and pound foolish.
Saving money is very important to gain financial stability. But unfortunately, many of us don’t know how to save money, as it is not taught in schools/colleges. If you are really interested to know how to save money, this article will be very helpful for you.
How to Save Money
Secret #1 – Pay yourself first!
Save by setting aside some money for savings as soon as you get your salary. Rather than trying to stop spending, it is easier and less stressful to prevent losing your savings. This also works off your positive energy – let us explain this. As soon as you get salary at the start of the month, move a portion of it into another savings account – this money could be anywhere from 10% to 30% of your salary. You could also make an automatic payment to a recurring deposit.
Secret #2: Shop intelligently
Every person has genuine needs that require shopping. So you can never stop shopping. However, you need to shop intelligently, whether you are buying household purchases from a supermarket or expensive items like home, motorcycle, a car or consumer durables. Shopping intelligently helps you save a lot of money without depriving yourself of any genuine needs.
Logically speaking, a person should buy only when it is really needed. However, many people buy things even if they don’t need them. Some people buy to show-off their status, some for the sake of experience and some to have a feel of being superior. Buying makes you feel good about yourself for a few hours. People often shop to feel better about themselves, they are addicted to shopping and they find it really difficult to save. So stop your shopping addiction to save money. Those who know how to save money are those who know how to shop intelligently.
Secret #3: Understand the difference between fancy lifestyle and being rich
One of the major reasons that many people don’t save enough is because they do not understand the difference between a fancy lifestyle and being wealthy. Most people believe they need to increase their spending habits and have a more lavish lifestyle once they have a little surplus. After all, they could not afford some things earlier and now that they have the surplus, why not buy things that they wanted and can afford.
Most people do not known that wealth is the number of years you can live without earning a single rupee based on your current living expenses. If your living expenses decrease, then your current savings will make you wealthier. Similarly, if your living expenses increase, then you become less wealthy.
Of all the wealthy people, only those who have a fancy lifestyle catch our attention. Many of them, having fancy lifestyle may become less and less rich with each passing month. While the steadily rich, live below their means and avoid fanciful lifestyles. Such steady rich people do not come into limelight and hence do not catch our attention.
For example, many small time entrepreneurs buy expensive cars like Mercedes Benz, Audi and BMWs. While smart wealthy people won’t. Narayan Murthy of Infosys fame with a net worth of Rs.7,000 crores uses a Skoda. Azim Premji of Wipro, whose net worth is Rs 85,000 crores drives a Toyota Corolla. These examples can be used as an eye opener to many entrepreneurs who spend lavishly instead of saving.
When you cannot afford to buy something, not owning makes your feel a lot worse emotionally. However, when you can afford buying something, but you voluntarily choose not to buy it, you do not feel bad. Because deep down, you know you can buy that thing whenever you want.
Secret #4: Open a separate account for your “saved money”
It is always better to have a separate savings account for your “saved money”. By doing so, you will never use the money for routine expenses. If you keep your saved money in your regular savings account, you will have to spend too much time in reconciling the accounts to find how much money you have saved and how much money is towards this month’s expenses. Or worse, unknowingly you will spend your saved money because you did not realise, you were using up your savings.
Preferably, you should not have a debit card or ATM card for this “saved money” savings account. If at all you need the money – you can use online banking to transfer from your regular bank account from this designated “saved money” bank account. This will clearly maintain records of using saved money.
If you do not have a separate account, you will not know how much balance you have for regular expenses like rent, phone bill, electricity bill etc. and how much money you have set aside for savings. As a result, you are very likely to use money from what you have saved for, making current month’s expenses because you think you have not spent the full amount from this month’s salary or budget.
Now that you are aware of the secrets of how to save money, remember, the quote “to know and not to act is not to know”. Now you have to make a commitment to use these secrets to save money, as much as your current income will allow. One of the abilities of self-made rich people is to save aggressively. If you build a habit of saving money, you will most likely accumulate a lot of wealth.
Now that brings us to one thought that may be lingering in our mind. Is it worth doing? I mean shopping discipline and avoiding fancy lifestyle looks like avoiding fun. One of the treasured things that people with lots of saving have is peace of mind. While those who are not financially intelligent are always stressed by money. This happens many times, even after having a very good income.
So finally, the big benefit of saving and living a financially sensible lifestyle is about peace of mind, reduced anxiety that allows you to enjoy life to the fullest.
We strongly suggest you to read:
Best Ways to Save Money – Easy to Implement
Quickest Ways to Save Lots of Money – Big Savings Fast
Habits that Save Money
Saving Money – How to Organize Expenses
Saving Money – Understand Your Spending
Budgeting Tool to Understand Your Spending