You can still save a little more than you already are by changing a few spending habits. Here are some life hacks that will lead you onto the path of greater savings.
All of us know that in order to build wealth over the long term, we need to save diligently and in a disciplined manner. But every now and then you feel like giving into temptation and make impulse purchases that impact your savings. The trick to long-term wealth creation is to save efficiently and that can require a little bit of inspiration. So, here's some for you.
Do you think you have run out of all ideas of how to save money, and there is no way that you can save more? Well then, here is some good news for you!
The cash only policy
Plastic money, like debit and credit cards are easy to use, and may just be the tap from where your hard earned money flows away. The fact the e-commerce is so attractive now giving deals everyday is fact that does not help either. You promise yourself that it's the last thing you are buying for yourself in a month and then you go ahead and spend some more! If you are reading this with a pang of guilt right now, we have an idea for you.
- Remove your card details from the online shopping sites that you use them in and put your cards away in a drawer or some other safe place where you will not be tempted to touch them.
- Think 20th century and live on cash only at least for two weeks.
- Use cash to pay everything from your daily expenses and shopping (if your budget still permits it).
- Live this lifestyle for at least two weeks to a month (if you can exercise restraint for that long!) and you will be surprised on the amount of money you will have saved by the end of the month.
- The cash you save can be used to pay back the outstanding amount on your credit card. Paying outstanding balances in full is also a sure shot way of maintaining a good CIBIL score, so make sure you give this topmost priority.
Ignore the extra cash
Rare as these occasions might be, you are likely to a get a windfall sometimes in the form of a bonus, a raise that comes with a promotion or a tax refund.
Instead of splurging it on the new gadget you have been eyeing, ignore it completely and put it away right then! If you have a substantial amount pending on your credit card or your emergency fund is not quite replenished, use the extra money to take care of these issues right away.
Take our word for it: the feeling that your debt pile is under control or you have enough funds to fall back on in case of a sudden unpleasant change in life is a much better feeling than basking in the glow of a new gadget!
Wait up before the big purchase
So you have been eyeing the latest smartphone, the sleek laptop or the LED TV that will simply liven up your living room? If you are thinking about making some such big purchase, we urge you to wait up for at least seven days before you go ahead and do it.
Use this time to take a look at your financial plan and whether or not you are on track.
Ask yourself what will be the impact of such a purchase on your finances. If you are really honest, chances are you will find out that your financial security is a better option rather than the fancy TV or the latest smartphone!
Go on auto pilot mode
Thanks to the advances in technology it is easy to put your savings on auto pilot mode. This means that you can use the electronic clearing system or ECS to direct your money into any investment vehicle, whether it is a MF scheme, an emergency fund or a pension scheme. Not only is it easy to track your investments this way, it will give you the mental peace of having saved automatically each month without making any extra effort.
By putting these methods to good use you will realise over time that you have not only saved a greater amount of money, but your debt pile is also under control. All of these habits will help you maintain a good CIBIL score. A good CIBIL score can be your ticket to access credit when you are in need of it.
We are not saying that these are the most pleasant things to do, and may be painful too at times, but if you do manage to implement them, you will surely have created wealth over the long term, and that, we can assure you is an intensely satisfying feeling!
Illustration: Uttam Ghosh/Rediff.com
The author is Co-founder and Director Credit Vidya.