Financial goals are set but how to achieve those? For money saving habits execution is as important as planning and every little step counts. As per behavioral change expert Dr. Hersh Shefrin, patterns and behaviors — especially financial ones — can be changed over time if new habits are performed repeatedly. Everyday money saving habits can improve your financial situation. Following are few money habits which can make the difference.
1. Auto saving/ investment before any other expense: As per goals and plan, invest or save fixed amounts with auto transfer money. But the key here is save before expenses, that auto transfer on the next day of the salary date.
2. Keep track of expenses: Keeping track of every month’s expenses can help you find loopholes where money can be saved. It’s a sin to keep data of all bills to analyze.
3. Shop in off season: Shop in advance whenever you find good deals.
Bonus tip: Penny saved is penny earned. Accumulate spare change cash and in six months you would be surprised to see the total amount.
4. Planning the next restaurant or store visit? Wait!: Scrutinize where you can save and avoid temptations. Compare prices, choose options wisely. Make a list of what is actually required before shopping.
5. Buy your needs but rent or borrow your wants: You need to differentiate between temporary requirements and necessity. Purchase for short term wish can have substitutes such as renting or borrowing. If you haven’t planned your big expense, renting or borrowing can be a solution instead of damaging the budget. Choosing ride hailing services like Uber/Ola over buying your own cars and that too via car loans is one way to go about it.
6. Be careful while spending in festivals: Festivals are believed to bring joy & prosperity in our lives. But they bring pocket crunching expenses as well. Strike a balance between indulging in festivity and not burn a hole in your pocket.
7. Payoff debts: In India credit card usage and debt increases by 20-40% every year. But with even 3% monthly interest on a credit card or 8-15% interest loans, calculate how much it costs extra. These debts or credit card bills should be paid on priority
Remember, every small thing can make a big difference. So start today with a small step