Raj started working right after completing his graduation. He received his first salary which was around Rs. 15000, and it is quite challenging for him to save money with such a minimal amount as he has to prioritize on his essential expenses.
Raj is trying to figure out how to save money from his salary and is looking out for money-saving options that will help him save more each month.
Let us understand how Raj can devise his own methods for saving money. Here are some money saving tips that will help him start his wealth creation journey.
You are not the only one who gets lost wondering about "How much of your salary should you save every month?" Undoubtedly, saving money to secure your family’s future is an integral part of your long-term financial well-being. For some of us, it may become a challenge to make a berth for saving every month as our expenses are greater than what we earn.
When it comes to managing your money and putting it to the right use every month, 50-30-20 rule is the right the method which you should religiously follow. As per this rule, you spend 50% of your salary on basic needs, 30% on your wants and save the remaining 20%.
But, with a minimum income such as Rs. 15,000, it will be difficult to follow this rule. Here are few tips which will help you to save money even if you have a low income.
A monthly budget is a blueprint for how much money you will spend each month. Monthly budgets are popular because many recurring expenses, such as rent, utility bills, credit card payments, and other loan payments, occur regularly.
The first step while building a monthly budget is to determine how much money you make each month. Analyse your spending behaviour for a month or two by tracking your expenses. Prioritize your essential spending and curate the budget accordingly. These major things will help you to curate your monthly budget.
Whether you want to pay off debt or save for a bigger purchase, one of the best things you can do to save money is to cut down on unnecessary expenses. Magazine or Newsletter subscription, unutilised OTT platforms, unused Gym memberships are expenses which you can chop off to save money. This will enable you to save and maintain your current lifestyle.
When you start earning, your first priority should be to build an emergency fund. Your emergency fund should be such that it can cover your three to six months' worth of expenses. It is important to make saving as your priority. The earlier you commit towards saving money, the better it would be to secure your future financially.
Paying off the debt with the highest balance might turn out to be a sensible solution. For instance, if you are focusing on debt payoff because you are hoping to qualify for a mortgage or another loan in the near future. Thus, reducing your balances fast and limiting your credit utilization can turn out to be your top priority.
According to this rule of thumb, 50% of after-tax earnings should be utilized towards your necessities and the rest 50% of your income can be saved. Since you have been building your emergency fund to cover your expenses of three to six month, you will end up achieving your savings goal in 1/9th of the time.
Your first paycheque or salary is usually not sufficient to make lump-sum investments. A systematic investment plan (SIP) is a preferable mode of investing in term deposits, mutual funds, or any other financial instrument. With this method, investments can start from as low as Rs. 500 per month and provide the much-needed flexibility to manage your savings along with your expenses. SIPs can also help you to plan towards your various financial goals in a disciplined manner.
There are tonnes of hacks to save money while shopping online. Always buy products during the loot and when there is a price drop on products. In loot, the prices of products are extremely low, and it is impossible to purchase products at loot prices in markets.
Below mentioned are few online shopping tips which can help you to save money.
Locking in your savings from your salary is an essential factor for your financial growth. Bonus earned at work or made a profit selling your house, by possessing extra money it gives you a chance to grow your savings and maybe fulfil your financial goals such as saving for a down payment on a new car. Save and invest in the right financial instruments such as mutual funds, PPF, emergency funds, and any other savings schemes. Safety and investment costs should also be considered when determining where you should save your money.
The economy was hit badly due to the coronavirus pandemic outbreak, which had led to a rising number of deaths all around the world. Health insurance will allow you to combat any medical crisis without having to spend money out of your own pocket. And in the event of your sudden demise, a term insurance plan will cover your family in your absence to take care of their needs. Make sure to get insured as soon as you can.
Having a side hustle can be an excellent way to boost your income. For many, side hustles can supplement the income from their regular full-time jobs. Figure out what you love to do and just start with it. Consider taking up freelance projects and choose the platforms accordingly that would help you out. This can be difficult with a full-time job, but by managing your time efficiently, you can work on your side hustle and develop a routine.
Saving money is the key towards financial security. Even though your salary is Rs. 15000, you can smartly create a pathway towards building a sizable corpus, develop a money saving habit and cover the cost of your future financial expenses.
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