It was only in the past 'savings' played a major role in monthly financial planning and these days I feel we [compared to our parents] concentrate more on spending and very less on saving. How much ever we earn we still feel we do not have enough savings for the future ! Also, having a safe amount as savings seems to be a distant dream to this generation. I came across this article by Economic Times at the right time and adding on a little bit of my ideas [shopping tips] to the original article here is today's post which I think is very essential for this generation.
You can read the original article here - Highly recommended !
|Eight Mantras To Control Spending and Start Saving by Economic Times|
I personally feel if you could save before you spend then you win right there ! I will share the equation quoted in the original article here,
"Many people are not able to save enough because they don't have anything left after all their expenses. Their financial equation is: Income - Expenses = Savings. Legendary investor Warren Buffett offers a simple solution. He says the equation should be changed to Income - Savings = Expenses."
When you set aside a significant amount for your savings then you not only have a good saving for your future needs but you could also indulge in guilt free shopping :) Don't you agree?
Mantra 2 - Wait Before You Splurge
They suggest a 30 day rule when you are tempted to splurge. You just have to postpone your urge to buy for another 30 days. This 30 days would give you enough time to rethink if the purchase is a necessity or just an indulgence.
Mantra 3 - Avoid Using Plastic Money
Make the difference clear that plastic money is just to make life easy but definitely not to spend a lot. Initially when you have just started saving leave the debit/credit card behind at home when you go to the mall. Taking only the available cash with you will restrict your expenses.
Mantra 4 - Start Small To Save Big
To start with save little every month. You could even start with as little as 10% of your monthly income and once you get the habit you will automatically start saving a lot.
Mantra 5 - Don't Be Pressured To Spend
Don't compare yourself with your peers or cousins or neighbours. Just because they have a luxury car it is not necessary even you have to get one too. I feel the one who has bigger saving is in a better state than the one with bigger house or bigger car. So compare your savings and compete :)
Mantra 6 - Levy Luxury Tax On Yourself
Once in a while we do splurge and when you think you have spent a lot take the same amount of cash and put it in to your savings account. This way you save and at the same time you restrict splurging.
Mantra 7 - Don't Spend To De-Stress
I strongly agree to this point. These days we use the term 'stress' very often and we end up spending a lot to de-stress. Instead we could start a hobby like gardening or baking rather than shopping. This would not only de-stress but also will save a lot of your money.
Mantra 8 - Fix a Budget and Stick To It
This is one of the oldest method and in fact the toughest mantra to start saving. I still remember my parents having a budget every month and no wonder they have a relaxed retired life now. I do set a budget every month but I am yet to succeed sticking on to it :p
I totally enjoyed reading the article and highly recommend you all to bookmark the page for future reference.
Happy Saving :)
♥ Aarthi ♥