7 steps you should take to improve your Savings

We are in era where the only thing which is certain is uncertainty. The world economy is facing one of the tough times and the development is slowed down. For the developing economy like India, growth has slowed down to a great extent and the macroeconomic data is not impressive either. We are in a time when inflation data too is not within the comfort zone and economic growth has slipped to all time low. It is however important for people to understand their spending and make every move regarding investment/spend in a judicious manner.

Seven steps which will help you boost your Savings Rate

1. Use of Plastic Money – Excessive use of plastic money should be avoided. We often see instant happiness when we buy gifts we love, however we regret when the credit card bill comes and the payment needs to be done within a stipulated time frame to avoid huge penalty.
2. Impulsive Shopping – Impulsive Shopping should be avoided. It is advisable to make a list before going shopping. This will help you avoid irrational purchase. Also it is advisable to stick to the list while making any purchase. Deals are offered to attract the customers, and no discount is a profitable discount for the customers. One should not get lured by the deals and end up buying unnecessary things.
3. Start small, Save Big – It is advisable not to postpone investments due to unavailability of substantial funds. It is advised to start Systematic Investment Plan or SIP based on risk profile. A payment of as low as Rs. 500 when accumulated regularly will grow. The sooner you start the greater benefit you get. Thanks to the power of compounding. Read about different Mutual Fund Houses in India and their SIPs.
4. Postpone spending, not Saving – One should postpones his/her spending and not saving. This is the best way to make sure that excess spending is not incurred. This also helps in maintaining monthly expenses. One should stick to monthly saving routine and postpone any major non-committed expenses.
5. Monthly Budget system – One should make a list of monthly expenses and accordingly set the target for saving. However, making the list and setting the target amount would do no good until one is determined to stick to the goal. It is advisable to check on the expense under different heads. If expense in one head shoots beyond the limit, it needs to be traded off with cutting of expense in other head. Funding of expense with saving is not advisable.
6. Reducing the Daily Expenditure – One should work towards reducing one’s expense per month in a minimum of one category. Cutting down a minimum of Rs. 20-30 extra each day is not impossible. However it might not seem big to you on a first look but it will add up Rs. 600-900 per month for your savings which can grow again with the help of compounding.
7. Continuous monitoring and assessing Savings – Monitoring budgets help you keep a track on your spending and ensure savings are always at the optimal levels. Revising the budget is suggested whenever there is a change in financial situation however savings again should top the priority list. This helps you maintain a healthy fund to counter unnecessary debts during emergencies.

Thus we see a proper financial planning is utmost important in the days of uncertainty. Money invested in a planned manner after proper due diligence grows and reaps benefit in the future. There is a well known proverb which says “A penny saved is a penny earned” so it is always good if you plan your expenditure, plan you savings. This certainly helps you in getting a safe and secured future and one can sustain life during the gloomy times of recession.