money saving

How To Inculcate The Habit Of Saving?

In spite of realizing it themselves and listening from so many people around themselves, most people forget the need to save and end up spending extravagantly on things they don’t actually require. All of us at some point or the other, are tempted into buying some expensive clothes and gadgets and spending all the income without a second thought. It is only after spending that we face the guilt of having lost the money for some unnecessary commodity that we could have gone without.

Saving is however not that easy and takes a lot of determination. You need to plan and work accordingly in order to make it count. There are a lot of ways to save money and you can choose and pick according to your own convenience. Here are a few tips on how to save money –  

Create a budget and keep track of your expenses

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Make a list of all the possible expenses for the entire month along with their prices like groceries, food items, essentials etc. and another list noting your sources of income and the budget for the month. This will help in balancing your income and expenditure. It will help you scratch unnecessary items off the list which can be avoided. Rather, look for cheap alternatives if available.

Set aside a part of your income

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You must set aside a particular amount of money from your earnings. It is a mandatory step in order to save. By putting aside some money for saving without fail you actually save money. This works like magic. You can either deposit it in your bank  or invest which will further add interest or dividends for you to earn.

Debt management

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You should always avoid creating debts. Do not incur huge expenses if you cannot pay for those immediately. It is also very important to clear off previous debts. The more the money goes into paying off previous debts the less you have left to save. So plan accordingly and be smart.

Set goals

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Goals like owning a house or a car help you save money. You can set realistic goals for yourself and also time-frames to achieve those. This would gradually create resistance in your mind and prevent you from spending extravagantly. Once a goal has been achieved, you can also spend a bit of that savings to appreciate your will to save.

Invest your money

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If you know the quirks of stock market, you can invest your savings in it. It can help you earn dividend. However, do not invest your entire savings in it as it is a risky affair. Divide your money into halves that you want to save and that you want to invest. In that case, you will not lose your entire savings even in the worst possible scenario.

Avoid unnecessary expenses

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That fancy meal in a restaurant or that gorgeous dress in the supermarket that you may have fallen in love with, can and should be avoided. These expenses are impulsive and can create a big hole in your savings. When you  spot something you want to own, stop and ask yourself whether you really need it. Tell yourself why it is better to save and get that mansion that is dearer to you. When you have cash in your hand such impulses are quite common and you must learn to restrict yourself.

Last but not the least, do not give up. Saving is a strenuous task and demands determination. You must take one step at a time and gradually move towards making your savings possible. Be wise, spend wisely, save as much as required. After everything, we must understand that saving is not above all. So we must save wisely and not by being a miser.