6 Tips On How To Save Money

Overspending is a very common problem during festival season. Online offers like 70% off, 80% off and season ending sale is making our purse lean. So, with this Christmas and holidays right around the corner, here are some tips on how to save and fatten our lean purse.

1. Pay yourself first

   If I ask you, how much of your total earning is yours to keep, you will quickly say every part of my earning is mine to keep, but did you not pay to your landlord, did you not pay for your food or did you not pay for your garments. In a same way for every 100 you earn, 10 is yours to keep.

   Pay yourself first by saving 10% of your total earning which in time will provide you income bearing investments and live with 90% of your earning. Once you start doing that, you’ll notice that you manage to get along just as well, you will also notice that money will come to you more easily than before.

2. Control your expenditure

   If you think you cannot save because you are not earning sufficient to satisfy your necessary expenses, then take a look at your peers who are earning very differently but still can’t manage to save, the reason behind this is necessary expenses keeps growing in parallel to our income, unless you keep them in check. Many people confuse necessary expenses with the desire and every person is burdened with more desire than they can satisfy.

   Therefore, write down on a paper everything that you desire and spend on only those that are necessary and is possible through expenditure of 90% of your income.Budget your expenses and do not touch that 10% of your savings.

3. Make money multiply

   A person wealth is not the money that he carries in his bank account; it is income stream that he built that continually flows into bank account. The money you save is gratifying to own and satisfy your miserly soul but earns nothing. Therefore, you should invest your money in well diversified manner like stocks, bonds, gold and let them compound over the year.

   A farmer, when his son was born, took 10,000 and gave it to money lender and money lender agreed to provide him 12% return every year, when his son became 20 years of age he checked with money lender and he explains because his sum is compounding year in year his original 10000 had now became 96,463. The farmer was pleased but he was not in need of money, so he again left them with money lender. When his son became 50 years of age, the father meantime has passed to the other world, the money lender paid to the son a whooping total of 28,90,022. His original 10000 has grown 289 times over the 50 years.

   Therefore, invest those 10% that you saved and let compound and let your stream of wealth continuously flow.

4. Protect your investment from the loss

   Before investing your money anywhere, make sure you have done thorough research and understood the risk involved and take decision accordingly. Consult a financial planner or consult with the experienced. Even if you make any loss from your investments, atleast make sure that you do not lose a penny of your principal amount. And Most importantly DO NOT fall in trap of Ponzi scheme Or Get Rich Quick scheme. Keep your greed of becoming wealthy fast in check.

5. Take Insurance

   Life of every person proceeds from childhood to old age and end with certain death. Therefore, A person who acquires a surplus income should give thought of future days and should make an arrangement from today itself for old age or any uncertain event.

   You should buy some LIC plan or Pension plan but before that make sure you consult with financial planner or some experienced person.

6. Increase your Income

   Invest in yourself through education, learn new skills, keep your knowledge up to date and focus on becoming more employable. You should have generalistic knowledge in every field but also have one specialized skill set. This new year take the resolution to increase your income by 50% and work on it. The more wisdom your acquire the more richly you’ll be rewarded.