What is life without a few aspirations? Each one of us havedreams we wish to fulfil in our lifetime. Whether it is going on that first international vacation, purchasing that dream car or building the perfect abode for our loved ones; we all have several ordinary to special things we hope to achieve in our life-span, which we call life goals. But it takes money to fulfil all these goals. What we need to do is set our goals across various time-lines, so that we can fulfil them at the right time. Here are a few easy money saving tips that can help you achieve various life goals.
Start by defining your goals: Before you can even start ticking things off your to-do list, it is important to start defining your various goals. Having the motive to save money can set you off on to the necessary path. Define your goals as best as you can. You could be saving to put down a down-payment on your home or hoping to purchase a car when you reach a certain career milestone. You could be saving to go on a world-tour or for your retirement; whatever the goal may be, it is essential to define them.
Set a timeline for each goal: Once you have defined your goals, you must work out a realistic timeline when you think the goal can be achieved. For example, most people begin saving for their retirement in their 40s. This is not a very smart thing to do since you have only under two-decades to save enough to live a comfortable life. Also, it is better to travel when you are young and energeticso that such goals can take precedence. You have to determine the ideal age to purchase your home too, since that is one of the major life investments. Once you determine these things, the next step is to come up with money-saving strategies.
Start recording your expenses: Whether it is that daily cup of coffee or the impulsive online shopping expense; a visit to a salon or an impromptu dinner date, you must keep track of all the expenses incurred in a month. After collecting your expense data, you must organise the expenses as per categories such as fuel charges, EMIs, grocery shopping, etc. and calculate each amount. You can refer to your bank and credit card statements to help you with this.
Prepare a budget and adhere to it: This is perhaps the oldest and the wisest piece of advice in the book. Nonetheless, it is extremely important. Preparing a budget helps you stay in tune with your expenses and come up with ways to save money on a tight budget. Your budget should typically outline how your expenses are measuring up to your income. Creating a budget helps you plan your expenses and motivates you to avoid impulsive purchases. Along with your monthly expenses, you must also factor in additional costs like vehicle maintenance, visits to the doctor and other miscellaneous expenses.
Create a financial plan: After understanding the necessary expenses and creating a budget, the next step is to analyse the amount of money left to save to put it towards investments. It is imperative to put aside a specific sum, let’s say 25% of your monthly earnings each month towards savings. You can distribute this sum towards various investments that can help you achieve high returns. While your employer may deduct an amount that goes towards your provident fund, that amount is not enough. As such you need to come with a money-savingplan that can also help your money grow in the long run. You could open a special bank account and deposit a recurring sum each month or put your savings in the stock market or invest in mutual funds. Really, there are innumerable possibilities.
Here are some more money saving ideas that may come in handy
- Use your credit card only if it is absolutely necessary
- Avoid impulsive purchases
- Shop during the sale season; whether it is online or retail
- Invest in the stock market and mutual funds
- Opt for online wallets that provide cashback offers
- Reduce your debt