Where can you find extra funds to save!

Saving is not about having a high salary- it’s about how smart you are with the money you already have. While you might be living on a tight budget and struggling to save money every month, here are some tips for you to save money on your salary, no matter how much you’re earning.

1. Lower your budget, not your lifestyle

Small changes in your lifestyle can lead to big savings. Look for cheaper alternatives for everything you do. For example, if you love coffee, try cheaper varieties such as instant coffee instead of purchasing a cup every day. If you love to read, try searching your local second-hand bookstore for a great deal on books, especially if it’s not a new release. Learn more about how to budget to achieve your dream lifestyle here.

2. Become a bargain hunter

Buying things when you need them might seem practical but could prove costly because you don’t have any other option at the last minute. Instead, create a list of everything you need or want in advance and keep an eye out for discounts or sales to get major discounts. This could be anything from a new addition to your grocery list or even shopping for a new jacket because your old one is worn out. This is especially applicable for festival shopping, as you can start planning gifts months in advance.

3. Embrace sustainable living

Living sustainably doesn’t have to be a big change- you can start with something as small as buying LED bulbs that last longer and use up less energy than normal bulbs. You can also introduce sustainable practices to your family by encouraging them to try and stay in the same room to conserve energy, or switching off lights when they move between rooms.

Similarly, while travelling to work, use public transportation or share rides with your friends. This will reduce overall fare and maintenance costs for your vehicle and is more eco-friendly.

4. Save from your salary raise at work

Don’t consider the money you get from your raise as extra money to spend- instead, decide where it needs to go before you get it so that you are less tempted to spend it on your ‘wants’. For example, if you decide that the money from your salary raise belongs to your retirement fund, you will be less likely to spend it as you will feel that you are ‘taking away from’ something rather than just having extra money to spend.

5. Maximise your tax savings

Under the Income Tax Act, you can save money from various deductions and exemptions. The most common section is 80C, which covers exemptions on interest from bank FDs, insurance, PPF and home loans, among others.

Talk to a friend or a financial advisor to understand the complete list of sections of the Income Tax Act that apply to you and how much you can claim under each. Make sure you file your taxes on time so that you don’t have to pay a penalty.

6. Revisit your monthly budget

Sometimes, the best way to find extra money is to re-allocate the money you already have. Go through your budget every few months to understand your spending patterns. If you are consistently staying under budget in an expense category (such as groceries or shopping), try to reduce the budget for that category by a certain amount (up to 5-10%). You can they use the extra money for your emergency fund or to repay your debts. Watch this video to understand how you can create a budget that suits you.

7. Grow your savings through investments

Let’s say that using one or more of the methods above, you manage to save Rs. 5,000 consistently every month- this means that you will save about Rs. 30,000 over the course of six months. However, if you invest the initial Rs. 5,000 (and every time you save money), you will earn interest on that. So, the best way to ‘find’ extra money is to actually invest your savings and watch that money grow!