With the never ending needs of the millennial generation and the desire for instant gratification, it is no surprise that we’ve plunged into an age wherein our wants and needs outrun our resources. The innumerable tantalising online shopping deals and offers don’t help either. Electricity, phone, internet, petrol bills are rising by the day, and your income is barely covering your needs. Not to mention you have mortgage and insurance premiums to pay and piling credit card bills. Sound familiar? Well, this is the economic condition of almost all middle class families across the globe.
With more and more options available to us, it has become difficult to differentiate between our wants and our needs. Have you ever found yourself in a departmental store doing your weekly grocery shopping and you ended up buying the whole store? Or maybe you were browsing and saw an attractive online shopping deal and ended up ordering a truckload of clothes with a credit card, because you simply couldn’t control yourself? Well, if things like this keep happening to you, then it’s clearly time to make a change.
Here we have a list of 7 tips that have been proven to minimise household expenses and in turn increase your savings.
- Set aside savings – To begin with, you need to put away a part of your income, say 5% or 10%, every month before you allocate funds to any of your expenses. A lot of people tend to spend their money first on everything they may possibly want, and then save whatever remains at the end of the month, if at all. This is a wrong way to go about it. By setting aside some money every month, you’re cutting down your costs and creating a small savings fund for emergencies.
- Create a Budget – You need to analyse your spending and make a list of all the expenses you incur during a month. Divide this list into 2 parts, one outlining the things you really need, the other outlining the things you want. For example, your kid’s school fees are a need, whereas treating yourself to a fancy dinner on a weekend is a want. When you’re done with this, allocate a fixed budget for all your needs, and stick to it. Automatically, you’ll realise that there’s quite an amount of money that’s leftover even after your monthly spending.
- Avoid impulse buying – The biggest problem that most people face is impulse buying. This basically means that you spend for stuff you don’t need simply because it’s in front of your eyes and looks attractive. Plastic money like debit cards and credit cards have made this all the more tempting. Psychologists say that paying through plastic money lessens the realisation that actual money has been spent. Hence, as much as possible, always pay in hard cash which will make you realise how much you’re actually spending.
- Lower your mortgage costs – The biggest drain on your income is usually EMIs at exorbitantly high interest rates. Find out if another bank is providing a lower interest rate, and transfer your mortgage accordingly. Same applies for insurance premiums. Increase your deductibles and reduce your premiums to only what is required.
- Use Public transport – Fuel costs put a major dent in your income. Although owning your own car is convenient and comfortable, it is also expensive. You could trade in your car for a less luxurious model, or you could choose to carpool to work with other friends or neighbours. Public transport is yet another reasonable option for your daily commute.
- Use efficient energy sources – Electricity bills have a tendency to go through the roof if you don’t keep them in check. Look up lucrative online shopping deals to avail power saving options like LED or CFL bulbs and lights which will save tons of money. Also avoid energy drain by unplugging appliances when not in use. Take care to always switch off lights, fans, and ACs when you leave a room.
- Cut away other unnecessary costs – There are a ton of miscellaneous costs that add to your monthly expenses. Cutting them out saves a lot of money.
- Instead of cable TV, you could get a satellite dish, or could simply use Netflix or Amazon prime subscriptions that work out way cheaper.
- Discontinue any and all club memberships, gym memberships and other random unused subscriptions.
- Dispose of all the unwanted junk in your house, put it up on eBay and earn some money through it.
- Last but not the least, reduce eating out. Takeaways are a lot more expensive than cooking meals at home. You could also grow your very own vegetation patch at home with basic vegetables and herbs to reduce costs and generate fresh produce.
- Free garage sale advertising sites are dedicated to helping you find the best deals in your neighbourhood.
With the right attitude, saving up, and cutting down on expenses can be fun, and may even work as a necessary economic cleansing that your life needs.