Why saving money isn’t rocket science
As the world gradually recovers from the effects of Covid-19, despite the appearance of the Omicron variant, the New Year’s holiday season will be characterized by shopping sprees. But it’s important to ensure that every penny counts.
About 62% of households in the Middle East reported reduced income and 49% saw increased spending during Covid-19, according to a PricewaterhouseCoopers study last year. The theme of savings therefore takes on even more importance during the holiday season.
Life is unpredictable. Without any indication of what to expect, it is best to be prepared in all possible aspects.
We learned an important life lesson from our parents: saving money. However, it becomes much more important in the last phase of our life, as saving money is a necessity for every individual on a personal level.
Managing your money and finances isn’t rocket science. Nor is it the hegemony of professional financial advisers. Usually, people who have trouble saving money fall victim to bad spending habits.
We’ve all been there – an indulgent purchase, an impulse vacation, an unforeseen emergency – these are inevitable situations in everyday life. But, you can easily adapt to these circumstances if you only spend after you’ve saved up.
Putting money aside in savings or investments in a systematic way can help you avoid financial problems. It can help you when needed and ensure that your family has a cushion to fall back on in an emergency.
Saving is essential for everyone, regardless of their income, expenses or stage of life. Here are a few reasons why you should start saving:
- It offers peace of mind.
- It ensures a better future.
- It covers expected future commitments such as child rearing.
- It protects your family in the event of a financial crisis.
But how do you save money? Here are a few tips :
Create a budget to save
It’s a good idea to create a monthly budget. You can plan at the start of each month to save and set spending limits. This allows you to focus on the essentials, minimize the risk of overspending, and put money aside as planned.
To stay on track with your budget, create a separate account for savings and transfer the amount scheduled on the pay date.
Record your expenses
If you’re struggling to save regularly, consider keeping a record of your monthly spending. This will give you a clear idea of where your money is going. You can then identify non-essential items and strive to save more money by avoiding them.
Use your credit card wisely
Credit cards can give you a momentary sense of comfort, but high interest rates can quickly drain your funds.
They offer rewards, cash back, miles or discounts. Careful use of these cards will help you get easy access to credit and save a decent amount of money each month.
The cardinal rule for the prudent use of credit cards is to pay the entire unpaid bill each month before the due date. Otherwise, the card provider charges high interest from the day of the transaction.
Track discounts on your credit cards
It is difficult to be fully aware of relevant offers, especially with cards and loyalty programs offering thousands of offers. Use aggregator apps to identify the best deals, saving you money while shopping for basic necessities.
Invest in long term financial plans
Watching your money grow over time as you save is essential. Investing in a long term plan offers a decent interest rate or return and allows your money to hold its value and outpace inflation.
Nitin Agarwal is the President of Hundred Offers.
Update: December 27, 2021, 7:10 a.m.