90% cannot give the correct answer if we ask the money they spend last month. Don’t you?
If you do not look at your bad expenses. Then you may have to face many problems because of this. And the best way to look at your expenses is to record them all somewhere in one place.
To make it simple you can use your smartphone also. Your smartphone is your current all-time companion. There is an app named “monefy”. Using this app you can easily enter any of your expenses according to the category.
As a result, at the end of the month when you will see 20% or more. Your income has been spent just on the things that are not really needed. Then you will become conscious about it. Otherwise, you will never know how much money every month you are spending on those bad expenses. As a result, you will never become aware of this thing.
1. Record your expenses.
The biggest obstacle to saving money is to identify the bad expenses. after identifying it, you have to stop yourself from spending over them. The technique that can help you in this case is ask and wait.
Due to advertisements or to grab some discount offer. We often buy those things that we did not really need to be true. So when you are buying something that confuses you. That maybe it will cost you a bad deal. Then you have to follow two things before buying that item.
1st step- ask- Ask yourself whether you really need to buy it, Or are you going to buy the item without no reason or maybe just to show off? If the answer you get is no, you do not really need that item, then there is no need to buy that item, But if the answer comes is yes, then come to the next step that is waiting.
Wait for 3 days and then again ask yourself the same question, do I really need to buy this item? Again if the answer comes yes then sure you really need that item. Go ahead and buy it.
2. Ask & wait.
According to a survey, 56% of people do not exclude any money as an emergency fund. But once again in every person’s life financial emergency arises for at least one in a lifetime. Whether it is due to losing a job or a medical emergency.
So the finance experts always suggest we should always keep a minimum of 6 months of living expenses aside for an emergency fund. So that, we never break down due to stress and anxiety, in any circumstances of life. And we should keep this emergency money in a separate bank account, which will have nothing to do with debit or credit card.
So that we do not put our hand on the money except the real emergency. So if you are one of the 56% people, then I would like to suggest you open a new bank account today and by making a cost-effective plan, gradually keep aside your 6 months living expenses in that bank account. It will help you the most in the worst time of your life. Because when you will not be able to do any work, your savings will work for you.
3. Save money and money will save you.
Many of us think about saving money somewhat like that, We should keep all the expenses of the month and then save the money that will survive. But one of the most successful investors in the world, Warren Buffet, said exactly suggests the opposite.
According to him, we should first save money and then spend the remaining money. We should first pay ourselves first and then others. So, after getting the salary, the first job is to leave at least 10% of the salary on the savings fund.
Then, putting aside at least 10% of the salary in the investment fund. the money is for our investment to understand the exact time and the right opportunity. With the remaining 80%, we should manage all the expenses of the month.
To do this correctly, you must first record all your expenses at least one month. Then plan accordingly, excluding all the bad costs, you can save just 10% of your salary or save more.
At the beginning of the month like this, the percentage is save separately by saving. And now almost every bank has a faculty of automatic deduction, which is also called a recurring deposit. Once it’s started in your account, you do not have to do anything yourself, each month, deductions from your account is automatic and saved separately.
4. Save first, spend later
These ideas came from George Clason’s book “The richest man in Babylon”, so if you want to know more about this. I would request you at least once to read this book. You can buy this book from the link provided below. https://amzn.to/2RULCcx
5. Stable job or source of income
All 4 tips are not applicable if you do not have job or any source of income. try to find one that is related to your interest and you can make money out of it.