- Education And Career
- Companies & Markets
- Gadgets & Technology
- After Hours
- Banking & Finance
- Energy & Infra
- Case Study
- Web Exclusive
- Property Review
- Digital India
- Work Life Balance
- Test category by sumit
How To Save Maximum Money From Limited Income
Focus on being debt-free as soon as possible and the money saved can be used more productively.
Photo Credit :
It is easy to save money when you have a high income, but how does one save money on a low income? For those who earn an average income, even if they pinch their pennies, living a decent life remains an elusive dream. Savings simply don’t figure in the to-do list. Contrary to popular belief, saving is more about creativity instead of accounting. A little bit of creativity can make a huge difference in money matters.
It is surprising to note that housing costs drain your budget more quickly then you realize. Besides mortgage payments, the cost of utilities, maintenance and repairs add up quickly. Ideally, total housing expenses should not exceed 35% of the budget. Keep a hawk-eye on utilities and implement conservation management. A well-maintained house can avoid costly repairs and keep maintenance costs low.
Debt is the biggest culprit in ruining finances. Accumulation of debt means additional monthly payments. The vicious interest rate cycle keeps your financial freedom at bay. Focus on being debt-free as soon as possible and the money saved can be used more productively. Do you know the interest rate on credit cards can be as high as 3.35 per cent per month or 40.2 per cent per annum! It may not be possible to retire debts at once, but you must make efforts to become debt-free in a gradual manner.
Entertainment is addictive. Who doesn’t like to dine out, watch movies or travel for fun? But prioritizing costs over fun can be very rewarding. A potluck dinner with friends can be an enjoyable experience. It can help to keep cost in check while having fun. A movie night can be enjoyed with the family at home with popcorn. Extensively use coupons deals to save whatever money on restaurants or movie tickets. Remember, the idea is to have fun and what better way to double it by saving money as well.
Temptation expenditures can hit your budget hard. Many budgets get derailed because of unnecessary expenditure which can be avoided. Mouth-watering deals and discounts can tempt you to upgrade your gadget, but instead of spending recklessly just because you want things that everyone else owns, you must prioritize your needs. Critically evaluate each decision, and purchase only if it is necessary. Follow this until you build a decent corpus. Remember, If you are tapping your savings to pay your purchases, you are doing something wrong.
The best way to resist temptation is to maintain two bank accounts. One for discretionary spending and another for savings. You can allow yourself to be pampered as long as there is balance in the discretionary account. Resist any urge to tap into your savings account. This will help you to automate your savings. It does not matter whether your income is sufficient or not. By saving a certain percentage towards retirement or other life goals, you will gradually become used to judicious living. Soon you will notice that saving money requires very little effort on your part.
This might not be easy. There may be a time when even hardcore control might develop cracks. Your goal should be to lead a balanced life instead of worrisome life. You require the willingness to resist expenses which do not provide long term value. Gradually you will see the savings pile up which will help you achieve your life goals with ease.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.