Saving gives you the freedom to live life on your own terms
By Sanjeev Jain
You don't have to overhaul your lifestyle to start saving. There are simple ways to save money and no matter what amount you earn, with a little discipline you can put some money aside in your bank account and become a 'saver'! Why should you save money? The best part of saving is the security it brings into your life- and suddenly you start enjoying life with more confidence! If you have cash set aside for emergencies, you may be able to take risks or pursue a new goal or try new things.
Warren Buffett said, “Do not save what is left after spending; instead spend what is left after saving.” This may sound as a very simple concept, however, a very few will never follow this advice. The concept is simple but saving money takes discipline, and also a little sacrifice. Inculcate the habit of saving, and once you have learnt the simple art of saving, you not only become prudent with money but also amass a corpus for various goals. Thus, saving gives you the freedom to live life on your own terms!
Once you have decided to start saving, the immediate action should be to identify your saving (financial) goals! But, before you
make a plan, remember to take into consideration any debt you currently have. In case you have debts, focus on paying them off as early as possible. However, it's also important to tackle high-interest-rate debt and to contribute to an emergency fund simultaneously, so that you have that emergency fund to tackle/face the unexpected expenses if any kind of emergency happens.
There are people who would say,"I struggle hard to meet my expenses, I can't even think of saving with my meagre income." If you also have a similar kind of thinking then here is a way to find out the amount you can save out of your meagre income: Get a notebook. Start writing every single item you buy or spend on a daily basis. Review all your spending at the end of the month. Try to figure out (and make a list) items or spendings which actually were avoidable. Stop spending on all the unnecessary stuff and you'll be amazed to find an amount which you can actually save! Continue to practice this at least for a year and you'll save lots of money out of the income you thought was not even enough to meet your necessary expenses!
There is a popular quote, "We buy things we don't need with money we don't have to impress people we don't like." Believe it or not, the majority of us, worldover, do this and waste their hard-earned money. How to not fall into this trap? Dress according to your lifestyle. Do not buy (spend) on expensive brands of clothing and apparel. Do not invest in expensive accessories just because others are flaunting - instead buy simple belts, wrist watches, purses or handbags. Avoid expensive bars and restaurants. Here are a few more simple but effective tips to save:
- Stop smoking
- Pay off your debt
- Stop buying unnecessary items to cut down your grocery budget
- Buy generic stuff instead of splurging on high-end brands
- Reduce energy costs
- Take a lunch box to work
- Always look out for discounts and pay in cash
- Declutter your home and sell everything that is of no use
- Don't pay interest on your credit card debt
- Separate wants from needs
About the author: Sanjeev Jain is a Senior Partner at Tata AIA Life Insurance
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the author. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you.