Tuesday, August 13, 2019

Money Multiplication

We work hard and smart to make more money but at the end of the day we feel that no matter how much money we make, we still cannot save enough. Even after getting a good amount of hike, we still struggle to save. Have you come across this thought? Lets understand why this happens.

This kind of situation would crop up if we are not reviewing our expenses on a regular basis. If reviewed, It would help us to avoid unnecessary purchases and help us spend on useful materials. We are easily attracted to the sales offers at stores and end up purchasing all that we do not actually need. When we    review the items purchased a couple of months back, the amount spent and also its usage, then we will get to know if it was worth the purchase.     ( I did not completely understand this part and I have edited this based on how I understood it. So kindly make changes as per your requirements)

Let's say we have purchased an item but its not being used for a long time and if we feel that it won't be used much in the future as well, then we should try to sell it off and use this earned money on something that is necessary for us or our families.

First and foremost thing to do is to manage money to discipline ourselves. List down everything we are responsible to pay at home. Please check out the below tips before listing items:

1. List your monthly expenditure along with the amount (Example - Recharges - INR 100, Salon / Beauty Parlour charges - INR 400/, Transport / fuel - INR 500 etc. )

2. List your expenses on special occasions (festivals and anniversaries) for the complete year (on a monthly basis) and see how better you can save money in advance for that occasion than spending all at once. (Just like the EMI)

3. List a section of our favourites (Shopping, Travelling, Special Food, etc.).This will keep us happy and when we are happy, we will be in a better position to keep others happy.

4. Add a section- "Salary for Mom" (amount based on your salary and other expenses) because when we take care of our mom's needs, she will take care of everyone in the family.

5. List the pocket money for non-earning members of the family (amount based on your salary and other expenses)

6. List down the Ongoing / Upcoming EMI's on different purchases.

7. List a little for Charity or other social cause (Responsibilities towards society.)

8. List on investments.This will make the money work for you instead of you working for money in the long run.

To Track the above, you may have your own strategy. For suggestions, you may use a notebook (traditional method) , Microsoft Excel,Mobile apps with predefined settings etc.

Tips to save unnecessary expenses:

1. Maintain a separate book / app to make a note of items that you wish to purchase (Categorize as personal and professional). 

2. If you wish to purchase any item, think of it for a week or two. During this period, try to find reviews about the item from various sources. At the end of this period if you have the same desire as it was when you initially thought of it, then go ahead and purchase. Once purchased, don't re-think about it.

3. If you love shopping, make a monthly budget for shopping (based on salary and other expenses). This amount needs to be fixed only for shopping and incase you do not make any purchase during that particular month, you may add it to the shopping budget for the next month. This way you can get time to think if the item is actually necessary or not. 

4. If you have the habit of  spending a lot on restaurant /street / fast food and are not happy about it, then try to make sure that your stomach is full before you leave home. By doing this, you will not only avoid feeling hungry but also not spend a lot on outside food. If you love to eat, then make a list of items that you wish to eat and have a monthly food budget (based on your salary and other expenses). This way you don't have to avoid your cravings for food.

5. For emergency situations, use a credit card. We all have a wrong perception about credit card that it’s very dangerous and it will add up to our list of problems. We should focus on the other side of the story too. You may google for insights on the benefits of credit cards.

6. Look for vouchers in the market or online space that can help you decrease your expenses while helping you purchase the items you need. Cashback offers at different online sites or at stores can help you with this if you are a little calculative. But, buy for need and not for greed.

These are only a few tips on saving money, which I have been following and getting results. There can be many others ways too.

If you have any such ideas which can help people in some way or the other, please get in touch with me by filling the form on the right and I will get in touch with you.