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4 Ways to increase savings

When it comes to saving money, it doesn’t matter whether you are rich, poor or whatever economic class you belong to. Besides being the crucial thing for an economically backward class to save money for their food, clothing and shelter, it is also a necessary activity that needs to be cultivated by the economically stronger section. There is no guarantee when and how are things going to turn for any person in their lives. Savings is the amount that is been saved apart from the monthly expenses an individual or a home possesses. 

The most important thing is to set up the goals for saving money and thereby build wealth. There are many ways to increase the savings for an individual. Some of them are as follows:

Set goal for yourself

This is the first step, when it comes to increasing savings either monthly or annually. Set the goal of your savings and try to increase than the previous savings target. The increase may not be a huge one, but it may be marginally more compared to the previous savings amount. Even if the target is not achieved in the beginning, at least you may fall into the previous savings target.

The realistic goals are needed to be set and then have to be achieved. This can be done by cutting the expenses which you may feel which are unnecessary like paying bills on time to avoid penalties. It is also possible to do a side hustles a.k.a. a part time job in order to move the needle

Do the pay for yourself

Make the habit of paying yourself and this becomes a habit which helps in stepping towards the financial future in a healthy way. A spending plan of yourself will include savings and it needs to be made a priority above spending for things. 

A crucial note here is about making extra money. When you find any sufficient time then that will be useful in making extra money, even if it is a small amount, it can contribute towards achieving the goal of increasing the savings.

Save the money in particular categories

Once the budget is planned by you then it needs to be worked so that you can reduce the expenditure on the categories which are falling into more expenses. This will be helping in focusing on the areas every month in particular and thereby the amount can be reduced easily which is spent each month.

For example, one month can be focused on the cooking bills and the next month can be focused on the utility bills and so on.

Avoiding impulsive expenditure and usage of plastic money

Shopping is one of the main reasons when we run out of the savings most of the time in most of the cases, so make a list of what exactly is required and then buy only the stuff which is needed. And also avoiding the usage of credit cards much can reduce unnecessary expenses thereby increasing the savings.

 

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Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 31 August, 2020, 13:52Be the first to give this comment the thumbs up 0 likes

I count only 4 ways. 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 31 August, 2020, 14:03Be the first to give this comment the thumbs up 0 likes

This is so 20th century. 

Was a time when credit card led to overspending but those days are gone. Nowadays, price is the same, whether you pay with cash or credit card. OTOH, if you pay with credit card, you earn rewards and get many other benefits that you don't get with cash. 

So many tools are available to automate many of these 4 ways e.g. PFM to categorize spend categories, deal apps to save spends, etc. 

Achin Puri
Achin Puri - Catalyyze - Gurgaon 31 August, 2020, 16:24Be the first to give this comment the thumbs up 0 likes

Hi Kethraman,

Thanks for your response. I understand, technical ways of doing things have changed in 21st Century. The way, our minds work has pretty much remained the same. Spending money in cash will still be perceived very differently by your mind compared to using plastic money.

 

Achin Puri

Achin Puri

Co-founder and CEO

Catalyyze

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This post is from a series of posts in the group:

Behavioral Economics in Banking

Banks can’t predict user behavior with absolute certainty, but they can help frame their financial decisions by understanding how choices are made, and designing solutions around them. This group is for all things behavioral economics in the banking industry.


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