Saving money is a tricky business, most people underestimate this topic. The general population is never educated about money, schools don’t attend to this topic even though money is essential for survival. People mostly learn about saving money or smart investing through life experience but by the time they learn, most individuals feel like they have wasted so much, they look into their past with regrets. Here are some tips to start saving your income early in life.
- Assets and liability: Know the difference between asset and liability. An asset is anything you own that consistently benefits you either financially or physically in life whereas, a liability is something that consistently deprives you to make financial gains, for eg: buying an expensive car that you want with heavy EMI for your daily commute is a liability whereas buying an inexpensive car with low maintenance that you need is an asset. Purchasing assets or liability will determine how productive your income is going to be, more assets you gain more money you’re going to save.
- Be aware of product marketing: We all want to buy branded products, products used by celebrities’ high standard people, products that make you look richer than you actually are, but are those products really worth it? Do those celebrities really use those products because they are really awesome to use or are, they paid to do so? Ask these questions to yourself every time you are tempted to buy a product that you see in ads or in the hands of your favorite celebrity. The truth is most well marketed and branded product cost way more than they are really worth, they charge extra for brand recognition and marketing that they do. There are lots of similar but less known products that give the same or even better experience than the branded counterpart but cost way less. Take some time to research, look for cheaper alternatives, learn the habit of smart spending, the smarter decision you make with every product the more you are going save every day.
- Don’t be a fool click here for the scoop: Spending money that you don’t have never ends well. Always know how much you earn and how much you are spending every month, if you think you are spending more then your earning, stop right there and figure out what you are doing wrong before you spend even more. Never use credit cards, they are designed to make you spend more than you can afford and keep you in debt as long as they can. Always keep your expenditure lower than your income so that you can make room to save money.
- Make goals: Every month set saving goals after you know how you earn and spend, start setting saving goals each month and make sure you touch that goal regularly. When you are comfortable with the previous goal, aim a little bit higher next month, find ways to spend less next month, test your limit of spending, try to control your temptation of spending on unnecessary stuff.