8 practical money-saving tips to achieve your financial goals

You must have heard the stories of people going from rags to riches. But do you know what else they did, apart from working hard? They knew how to save money. One of the wealthiest people on the Earth, Mr. Warren Buffet, is known to use coupons to buy food. There are several similar stories about other super-rich people following simple money-saving tips.

There is no harm in including some practical money-saving tips in your daily life. Remember, a penny saved is a penny earned. Whatever savings you make today can help you achieve your future financial goals.

Top money-saving tips to achieve your financial goals
 

Below are a few money-saving tips that most financial experts recommend 

• Avoid spending on things that are not needed

The first thing is to avoid unnecessary spending. You need to understand the difference between your needs and wants. Needs are the things that are necessary for your survival, such as food, water, shelter, clothes, medicines, etc.

On the other hand, wants are the things that are not needed but you desire to have. These include a high-end smartphone, a luxury car, etc. You cannot ignore your needs but curb your spending on wants.

Also read - Savings Account - the investment tool that you did not know existed

• Try to follow the 50-30-20 rule

One of the easiest ways to limit spending and maximise savings is to follow the 50-30-20 rule. Distribute your income into three parts – 50% for your needs, 30% for your wants, and save the remaining 20%. You can even flip the figures per your current age and financial obligations.

For example, if you are young and have fewer responsibilities, you can save 50% of your income, spend 30% on your needs, and the remaining on wants.

• Cut down on grocery expenses

As per a report by Fitch Solutions, an average Indian household is expected to spend 35.3% of its budget on food by 2025. Thus, if you curb even a little of your monthly grocery expenses, it can make a big difference at the end of the year. For instance, you can reduce the number of junk food items you purchase every month. Not all are healthy, and you can save a few extra rupees each month.

• Do not leave the room without switching off your fan or AC

Make it a habit to switch off the lights, fans, or air-conditioners whenever you leave your bedroom or office cabin. Even a minor reduction in your monthly electricity bill can significantly affect your savings.

• Stay in budget hotels when you travel

Irrespective of whether you are travelling for a professional or a personal reason, you can choose a budget hotel for your stay. If you are travelling alone, you can even book a room in a low-budget hotel that offers all necessary services at more affordable rates.

Another money-saving tip you can apply is to travel by public transport instead of private cabs. Travelling in buses or trains can make your journey comfortable without burning a hole in your pocket.

• Use a credit card to meet your monthly expenses

Credit cards are extremely useful financial tools. You can use them to meet your monthly expenses, including grocery purchases, utility bill payments, booking movie tickets, dining, etc. When you use a credit card to make certain payments, you earn attractive discount vouchers, reward points, and cashback. You can utilise these to enhance your monthly savings.

You must remember that credit cards are double-edged swords. They can help you immensely if you use them diligently. But if you fail to remain vigilant, they can lead you into a debt trap.

• Make proper use of income tax deductions

The Government of India has allowed several tax deductions to help citizens reduce their income tax. These deductions are made available with specified conditions under various sections of the Income Tax Act of 1961. You can avail of these deductions to reduce your taxable income and save more.

For example, you can avail of a tax benefit of up to Rs 1.5 lakhs under Section 80C by investing in schemes like Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), and National Savings Certificate (NSC), among others.

• Start investing your savings

You need to understand that saving and investing are the two critical pillars of financial goal management. After saving a certain amount, investing it in suitable investment instruments is equally important. Investing your savings allows you to beat inflation and create an adequate corpus for your long-term financial goals.

objectives. The most basic investment tool is a Savings Account that provides around 6% interest on your savings. You can also invest in market-linked instruments such as shares and mutual funds to make high returns with associated risks.

Also read - Benefits of having more than one Savings Account

In conclusion

By following the money-saving tips mentioned above, you can significantly increase your savings account balance. With IDFC FIRST Bank Savings Account, you can earn up to 7% p.a. interest on your savings. You can also enjoy unlimited cash withdrawals from ATMs across India. Click here for more details.

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.