A comprehensive and visionary savings plan can help you gain financial independence early. If you don’t have to rely on monthly paycheques to fulfil your daily needs; you will have to build discipline and dedication to set up a savings plan and stick to it. Here are some tricks that can help you save money:
1. Invest your yearly bonus
Your month-to-month expenses could be taking up a chunk of your salary, and that might leave you with little or no money to invest in a monthly savings plan. One of the tricks that you can use is to invest the annual bonus that you get in a separate savings scheme. In this manner, will not feel a pinch every month, and yet be able to save a considerable amount annually. Similarly, you could also invest a part of the surplus amount that you get as a yearly increment.
2. Have a separate account for saving
Although having different bank accounts could be tougher to manage, sometimes having a separate account for your savings could help. In this account, you can put any surplus amount that you have at the end of the month and make a rule not to spend this amount unless there’s an emergency. This savings and investment account could be a life-saver for people who are unable to save each month. Over the years, it can create a vast corpus for them, which can be used for their retirement planning or even emergencies.
3. Keep paying the EMI amount
If you have been paying a monthly EMI for a car loan or instant personal loan for a long time, you might be used to a big part of your salary being shaved after being credited. When the EMI is over, you may feel like splurging the exta money on things you might not necessarily need. However, instead of spending money, when your loan is finally paid off, you can keep saving the same amount each month in a savings scheme or a recurring deposit, and think of it like paying EMIs to your future self!
4. Invest in long term schemes
Investing in long term savings scheme which doesn’t allow a quick exit can help you save more. Put your money in long term saving schemes which discourage early exit. PPF schemes, insurance policies, retirement policies, as well as an education fund which has a lock-in period of 10-20 years, can also give you return ranging from 10-30%.
5. Think before spending
Lastly, many times, we feel like spending money on frivolous things or luxuries which are not needed. Though it is ok to indulge once in a while, it is crucial that you to take some time and think before making every big purchase. Weigh the pros and cons of your purchase and see whether you need it or simply want it. Online shopping makes you overspend easily, so it is better to leave some products in your cart for a day or two before making a final purchase after thinking carefully.
As the saying goes that a rupee saved is a rupee earned. These simple ways can help you spend less and save more. By investing your money, you can multiply your money and become financially independent as well as create a separate nest egg for emergencies. At the end of the day, you need to be serious about saving money and exercise fiscal prudence in order to secure your future.