You would have often heard the proverb, “A penny saved is a penny earned.” This age-old adage holds true even in modern times. A small amount of savings every month can go a long way in helping you build a large corpus over the years.
Money plays a crucial component of our lives. To enjoy a comfortable and stress-free lifestyle, we need to start taking charge of our spending as well as savings.
2020 has so far been an uncertain year due to the Covid-19 pandemic. The Coronavirus outbreak has dealt a severe financial blow to millions of individuals as well as businesses. In these uncertain times, having sufficient savings that you can rely on offers huge peace of mind.
In this article, we take a look at some of the best ways to save money in 2020. Following the steps listed here would help you to start saving and build a sizable savings in your account in the long run. It doesn’t matter whether you’re a salaried individual, a homemaker, a businessman or a student, these tips can surely help you in saving the most money in 2020.
Set a Goal
Carefully observe and amend your spending habits as far as possible. This could go a long way in saving with specific goals in mind. For example, if you are looking to take a two-week vacation or are planning to make a down payment for your home, you can start mentally preparing for what could be a savings marathon.
If you are considering relatively smaller goals such as buying a new laptop or online shopping for branded clothes, you can look at it more like a sprint. This means, once you have achieved it, you can add another goal, whether big or small, to the wish list.
Keep a Check on Non-Essential Purchases
Irrespective of how much you plan to save, you need to consider where all of your money is being spent before you start putting away a portion as savings. To track this, on the first day of each month, check what and how much you spent in the prior month.
You can segregate essentials and non-essentials into different categories or lists. Essentials are usually fixed costs such as rent, EMIs, groceries, etc. On the other hand, non-essentials allow you some scope to make amendments such as reduced dining expenditure, luxury goods spending, etc.
Think of all the things that you can forego and make a mental commitment to saving that money for the future. For instance, can you avoid ordering food a few times a week and cook at home instead? Reducing gourmet food purchase could be another option. If you’re spending a significant amount every month on food orders, try to find a way to cut down on some of the spendings.
When it comes to the final figure that you should ideally be saving, 10% to 20% of your total income each month can be a good benchmark for a start. You can also consider adopting the 50-30-20 rule. This rule aims at switching 50% of food orders to spending on essentials; 30% on non-essentials; and 20% goes to savings.
Tracking of expenses very closely could be overwhelming for many. However, many apps can do this job for you by linking directly to your bank accounts or other sources which you use to spend money. The apps usually provide alerts when you’re confused about overspending or breaching a certain threshold of spending.
Keep Track of Debts and Make Way to Reduce It
There is no fixed solution when it comes to debt that you have sourced at very high-interest rates. The most common category is your credit card bills. Let’s assume that you have some money saved for emergency needs.
High-interest debt is something you must sort out before you aim your savings goals for the long term. However, if you do not have an emergency fund set up, you can start one before you begin paying off debt. To achieve this, you may need to save at least a few months of earnings.
The advantages of getting rid of high-interest debt are manifold. For a start, the faster you pay and close it, the fewer expenses you will have to incur in finance charges. Along with this, once the debt has been paid off, you can allocate the amount you were paying towards EMI into a savings account. By taking these measures, you may not feel the pinch since you are already used to putting away that much money.
Pre-Schedule Recurring Expenditure
For expenses that are to be paid every month, you can schedule a recurring amount of money to be transferred directly from your earnings account to a linked savings account. This strategy could relieve you from having to remember to save for the expenses and minimizes the risk of spending all the money before it’s saved or necessary payments are made.
One of the better ways is to arrange for a portion of your paycheck to be directly deposited into a savings account. This way, it will never hit any another account and you will have the needed money. If you are privy to an employer-sponsored retirement plan, you can choose to make regular payments to that as well.
Get Smart with Online Shopping
Online shopping offers many discounts and benefits as far as the Indian market is concerned. Online shopping can help in saving a lot of money. The prices offered in online shopping spaces in India are very competitive, and there is intense competition in the past few years. Due to the Covid-19 pandemic and its impact, the online shopping space is expected to have more offers and discounts to lure maximum customers. Always be on the lookout for coupons and discount offers before you make your purchases.
Plenty of websites publish periodic coupons. Keeping track of these coupons can help you save every time you checkout. Besides coupons, also look out for cashback offers, welcome offers, etc.
Different sites offer coupons that will help you in saving money while buying online. Not just coupons, you can also get many cash-back offers which come as direct credit in your account.
Another common trick that is used by savvy online shoppers is to add the desired item in the shopping cart or wish-list but leave the site without completing the purchase. The website’s algorithm tracks this and lures shoppers with an enticing discount.
Save Today for a Safe Tomorrow
We live in an uncertain world. The ongoing pandemic has reinforced this belief. Nobody can guarantee you a jackpot as far as saving and increasing money is concerned. Apart from considering the above-mentioned tips, it is important to be insured at all times to avoid any type of unpredictability. Life and medical insurance help individuals in the time of disparities and there are various schemes one may choose.