Are your expenses skyrocketing? Are your balances in various bank accounts depleting at an alarming rate? Are you at a risk of defaulting credit card bills/mortgage payments? You are not alone and many of us Indians are falling under this category. Due to the current economic conditions such as rising inflation, pay cuts and downsizing of companies resulting in mass unemployment, many of us Indians are forced to live on a tight budget. Under these circumstances, we are saving little to nothing and are putting ourselves at risk financially at a future date. But what if I suggest to you some of the best and proven ways to save during this phase of financial hardships?
In this article, I will be covering some of the proven ways to save money while on a tight budget.
1. Record your expenses
The first step you need to take in order to save is to record your spendings. If you are not tracking your expenses and calculating how much you are spending, you will be spending without a yard stick and you will eat away significant portions of your savings. By keeping track of your expenses, you not only can keep track of how much money you are left with, but also you can decide upon the expenses and eliminate unnecessary ones with ease. There are many tools at your disposal to keep track of your expenses. Some of the useful apps to keep track of your expenses on your smart phone are
These apps are user friendly and will provide you with quality data with graphs and pictorials. As these apps are downloadable on your mobile devices, recording expenses will become much easier.
2. Create a detailed Budget spreadsheet
By creating a well defined and detailed budget can help you out. Go through the budget with a fine comb, there is a high chance that some of the elements on your budget which can be revised will come to your notice, enabling you to take advantage of it. Use Ms Excel to create your budget, in that way revising the budget will become much easier. Make yourself familiar with basic and essential tools of MS-Excel.
3. Automate the saving process
With all the responsibilities you carry on your shoulders, you might forget to save money for the month. To avoid such an inconvenience, make the process automatic. Banks offer the facility to automatically debit a said amount from your salary account to your savings account. There are many third party apps which will help you with automating the savings process. But before opting for a third party application, make sure you are availing the service from the bank if it is offering one.
4. Cut down on OTT Subscriptions
It is common for people to take out subscriptions on multiple OTT platforms such as Netflix, Amazon Prime and Hotstar. But to be honest, you will not be using all OTT platforms to which you have subscribed to. In other words, you are burning money on platforms you make no use of. Cut down on such subscriptions. Take out one subscription. If you are a sports person, take out a sports channel subscription, if a movie person, subscribe to only Netflix. An Average Indian Spends around ₹32,000/- on OTT subscriptions per year. By cutting down on such spendings, you can make a significant impact on your savings account.
5. Try improving your credit score (CIBIL Score)
By improving your credit score(CIBIL Score), you can avail loans such as car loans, housing loans, student loans, travel loans, and many loans at a much lower interest rate. In this way you will save on interest paid to such loans taken. To know more on different ways to build your credit score, check out this article by HDFC Bank
6. Check on your Tax Expenses
There is a high possibility that you are overpaying your taxes to the government. The extra money that you are paying can be saved, and the government has to be noticed regarding your overpayments. Hire the services of professionals who will audit your accounts and will help you reclaim the extra tax paid. They will also make sure that from next time you pay not a Rupee more than the required sum of tax to the government. Enquire regarding independent Chartered Accountants services around your locality.
7. Refinance Current Loans
Various loans that you take out can be refinanced or consolidated in order to give you a lower interest rate. Check with your loan officers or bank officials to explore this possibility. Check out this article on loan refinancing to know more.
8. Cut down on Food expenses
This strategy will not only help you save money, but also in improving your overall health. We eat out for lunch when at work, grab snacks at the local mart. This habits are hard to break at first, but after realising the benefits of breaking such habits, it might become less hard to break them. By cutting down on junk food consumption, you will not only save money but will also reduce your chances of getting cardiovascular problems, obesity and your mind functions a lot better after you stop munching on junk.
9. Find a way to save on rent
Consider moving into a smaller apartment for the time being. If you have changed your job, or a work from home option is a possibility, find a smaller apartment with a low rent or move to a less expensive locality. Housing rent is the biggest part of the budget for anyone who does not own a house or has to move to a new place to find work and has to rent a place.
Malcolm Ethridge, certified financial planner, executive vice president and fiduciary financial advisor with CIC Wealth Management says “People who rent an apartment or house, they may not know it’s possible to negotiate their next lease when the landlord makes an offer to renew. This is especially true for those who rent from an individual or a smaller property manager. It’s also a good idea to try and lock in a longer lease now if they plan to be there for a while. And the landlord will likely be even more flexible on rate if they know they have you locked in for 24 or 36 months instead of 12.”
10. Check for lower insurance packages
Check with your insurance provider whether there is another insurance plan with a lower payment rate which has the same coverage as your present insurance plan does. Compare insurance plans of different companies with your current plan. Talk to an expert if you are unable to make a decision on your insurance plans. Check if your current insurance plan has any hidden costs, and compare with other plans which have comparatively less hidden costs.
Living on a tight budget is challenging non the less. But the main aspect is your commitment. Remember, it is your plan to save your money, so that you put yourself at much better position in the future.
Check out my other blog postings which talk about various financial and entrepreneurial elements which you might find useful or fascinating,
Financial education is a powerful tool at your disposal. Check out the following articles to know more about the world of finance.
Comments