Learn How to Save Money

One cannot save or manage money by simply sitting with a calculator, a pen and a paper. In order to manage and save money, it is important to do some study and research. One needs to study his or her source of income and expenses, investment opportunities, plans to invest and how to save money on tax. Consultancy from some expert financial consultant can also be helpful.

Income and Expenditure

The first step to save money is understand where all the money is coming from and where is it going.

Where is money coming from: For a working person, the source of income can be a job, a profession or some business. Students get their monthly expenses either from their parents or from some part-time job. Retired people get money from bank interests or pension.

Where is money going: Bachelors and maids spend most of their money on clothes, cosmetics and make-up products, gifts, movie tickets etc. Parents spend their income on school fee for children, house expenses including food and clothing and other necessities and even EMIs.

In order to make any saving, it is necessary to cut down some of these expenses or increase the income. If the monthly income is fixed and cannot be increased, then saving money becomes more important.

How to Save Money

Here are some simple tips and ways to manage and save money for future:

Make a budget: The first and foremost important thing for anyone to be able to save any money is to make a budget. Give priority to important and unavoidable necessities. While preparing the budget, keep in mind the monthly income and the target money to save. Prepare the budget on a worksheet and keep a record of it for future reference. One may also have to sacrifice some of the luxuries. Quit smoking. Quit drinking. Use car pooling to go to office. Don’t buy branded and expensive clothes or products (Non-branded products are not bad at all). Do some bargaining at the stores. Keep eye on ads for offers and grab the best offer in the market. Little bargaining can also save some money. Get rid of unnecessary expenditures. Save energy and slash electricity bill.

Start a savings plan: Once the budget is made and some money is saved, choose a savings plan. Open a savings bank account or choose a monthly savings scheme.

Investment and tax saving: Invest money wisely and save tax. Explore all the opportunities of investment and see where there is maximum possibility for growth. At the same time also check out for plans that help to save tax. Consult a financial expert for advice. Little fee paid to the consultant can be beneficial fin the long run.

Two bank accounts can help to save money: Open savings account in two different banks – bank A and bank B. Now deposit a fixed percentage, say 20% or 30% of the total income in bank B. Never touch or spend this money. Keep all money intended to be spent in bank A.Once a good saving is accumulated in bank B, explore all possible investment opportunities with the least risk. Starting a home-based small business is a good opportunity.

Saving Money for Future

Money saved is money earned. Save money for future when there will be no source of income. You may not get rich by saving little money, but it can surely add to be enough for old age. Follow the golden rule – “Live like no one now so that you can live like no one later”.