It’s every white collar’s dream to get a job that pays the bills and still is able to do savings. However, with the rising inflation, the cost of living has increased too which makes it even more difficult than ever to plan for their future. Saving seems more like a dream now. But there are certain ways to boost your chances of successfully saving money to better manage your finances.
These tips will help you not only in the short run but also increase your chances of being able to buy a plot and be able to construct a house too!
So, are you ready? Here we go!
1- Define a budget
The heart of every expense ever made – it’s the budget. Budgeting helps you to prioritize your needs and daily chores. This way you can find a perfect balance between spending and saving the amount throughout the year.
For instance, keep a tight track of your credit card bills, bank statements, and receipts to calculate the regular expenses such as rent, home loans, electricity, etc.
Calculating the expenses from the income, deduct those at the very beginning. Such expenses are unavoidable and cannot be compromised upon. So, if you were planning to buy a house somewhere in the future, you can already estimate the cost with the DHA Multan payment schedule and save the money aside for down payments and installments.
So once you have deducted the daily recurring expenses or monthly basis, it will become easier to set the budget.
2- Track the spending
The common misbelief is that the big expenses disturb the spending. But that’s not the case. Often it’s the little things that keep adding up that end costing us more.
Perhaps, it is important to track the day-to-day spending too. Even with a defined budget, you can easily fall short of the cash in your account. To avoid such a scenario, check the bank statement so that you can check the amount going into your account.
You can also compare the bank statements before and after the budgeting. Then you can clearly see the difference between the two statements. It will be easier to identify the areas of expense you can cut down (say goodbye to impulsive purchases).
3- Pay your credit card bills
Credit card rates build up every year. You can rush to use a credit card which can easily undermine the budgeting in a big way. The modest goal to save money goes down the drain pretty quickly.
However, if you pay the credit card in full, you can avoid the interest charges and late-payment fees. But if you fear you cannot be trusted with a credit card, then simply cancel the credit card. But then, if you want to avoid going crazy with the impulse to shop every time you see something appealing in the display window, give yourself a margin to buy one item, that’s it.
4- Open a savings account
What happens if the credit card idea does not work for you at all? That’s a bummer! Another way to save a certain amount of money is to deposit it in a savings account with a higher interest rate.
To keep an amount discrete from your income is a good way to save money for long years. The temptation to spend money will be controlled by setting up automatic scheduled transfers.
This approach is very effective when planning to invest in buying a house a few years from now.
5- Do not ignore recurring expenses
Remember that it’s the recurring expenses that offer you the most ground to boost your savings. When budgeting, take a look at the previous year’s bank statement. The amount that can be saved is staring right back at you.
Spend a good amount of time planning the recurring expenses. For instance, if fuel prices are more it means the traveling expense will increase too. Instead of going in your car alone, you can offer ride-sharing so that the cost of fuel divides. It will benefit you and others in the same way i.e. reducing the traveling expense.
All of these tips will work only if you can control your impulses to spend. Expenses are just like the tip of the iceberg. The real concern is to understand the reason for that expense. So make a plan to control your budget from now on and see what works for you.