5 simple ways to start saving money

How to start saving money?

Simple actions that can put you on the path to financial freedom

The all-important budget allocation

"Budgeting isn't about limiting yourself - it's about making the things that excite you possible"

Budgeting is the most important financial activity you will undertake. Realise that even major economies and corporations function on budget allocation – your personal finances should not be any different. Once you factor in what you will need for the basics such as food, rent, utilities etc, look for saving and investment opportunities. Budgeting does not restrict you from undertaking fun activities, it only lets you know how much you can spend on these without going overboard.

Needs Vs. Wants – Prioritise, Prioritise, Prioritise

"Don't tell me what your priorities are. Show me where you spend your money and I'll tell you what they are." - James W Frick

Prioritising your needs over wants helps you spend prudently. If you plan to buy the latest QLED TV on an EMI that requires you to pay a 14% interest, you may want to ask yourself if you can put off purchasing by a few months. Depositing the EMI amount in a bank will help accrue the savings account interest rate instead of paying interest. Not only will you be able to purchase the TV debt free, you will also gain the interest that the bank pays you. Prudent spending is always the key to saving.

Invest – Make your money work for you

“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” - Albert Einstein

One of the best ways to save more is to develop multiple sources of income. And the easiest way to do that is by investing wisely. IDFC FIRST Bank, the best bank for savings accounts in India, offers a variety of savings and investment options depending on your risk appetite. While it is desirable to listen to an advisor, it is imperative to do your own research and understand where and how your money is being invested for best ROI.

Spend to save – Long term or short term?

"The easiest way to save money is to waste less energy." - Barack Obama

One of the best ways to save a lot of money long term is by investing in energy saving devices in your household. Getting an energy audit or investing in a high energy star rated devices. These may cost more than low rated energy, the savings in energy over the long term can be substantial. Add to this the environmental benefits and the choice is clear.

The power of pooling

"Alone we can do so little; together we can do so much." – Helen Keller

Just like compounding, there is great power in cooperatives. Investing in units with proportionate equity can bring in great returns in the long run. This could be property, equity or stock, ETF or even something as simple as a shared automobile for common use. The savings in loan interest by itself can come as a big opportunity to bolster savings when you buy into a pooled asset.

Saving money, investing prudently, finding financial freedom and becoming wealthy – these are a result of relentless discipline and healthy habits. Resolve to live a life of financial hygiene and planning. Learn how to start saving money and connect with an IDFC FIRST Bank investment adviser to know more about the various investment options available to you

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.