We present five simple but brilliant ways to save money and create a large corpus for your future use. Open an online savings account and let’s get you started on the road to financial independence.
It is said that money cannot buy happiness. And yet, it is futile to be this dismissive about it – after all, money is needed to run your daily life. It pays for food, clothing, education, travel and everything that matters.
But though every person has money in their hands, only a few of us exhibit good financial acumen when it comes to planning for the future. Each of us wants financial independence – and the first step is saving money.
Consider these simple saving tips to build a large savings fund for the future:
#1 Open a savings account.
The first step towards financial freedom for the future is a simple one – and you need to get your bank involved. Start by opening an online savings account. You may also open a savings account after visiting your bank branch and filling out paperwork. But you will find that opening an online savings account saves both time and money. Leading banks in India offer the option of completely paperless banking by letting you open the savings account online from start to finish. Fill out the form online and upload the self-attested documents that the bank asks for. The bank processes the application and approves it, and the savings account is deemed opened. You can now start depositing money in the savings account regularly. Over time, the savings fund develops into a large amount, and you can earn quarterly savings account interest on it as well.
#2 Budget for the month and don’t exceed your spending limit.
A good way to start yourself on the road to financial freedom, is to curb your spending. There is a lot of wisdom in the adage, ‘A penny saved is a penny earned’. The money you save every month by just curbing unnecessary expenses can be routed to your savings account – thereby adding to the size of your savings over the long run. Start by analysing your monthly bank statement. It shows you all the heads of expense, from bill payment to shopping, and from eating out to travel. Study the areas where you can curb expenditure. For instance, you can carpool instead of driving your own vehicle to work every day. You can cook at home instead of eating out frequently, and restrict your shopping to once a month instead of once a fortnight. Soon, you will start having more money left over in your account when you curb the areas of expense that can be done away with.
#3 Set goals.
Nothing concrete was ever achieved without setting goals – and these goals must be framed with realistic time frames and with goalposts along the way. For instance, if you wish to buy a house in two years, you might have to save a certain amount of money towards the down payment. Estimate how much money you will need, and break down the sum into a 24-month period. Now start saving accordingly, or create a two-year investment like a recurring deposit to help further the goal.
#4 Do everything online.
The Internet is a veritable blessing for all of us – it provides instant access to whatever you need, and you can shop, bank, pay bills, book movie or travel tickets, chat with friends and even watch movies online. More to the point, the digital medium helps you save a lot of money when you transact online. Most shopping sites offer discounts on almost all merchandise all year, while you can buy insurance products at reduced premiums and get a discount on application cost of home loans when you buy them online. Transaction fees are further reduced when you use apps like UPI to transfer money to online merchants. This is a lot of money saved that you can route to your savings account.
#5 Monetise owned assets.
You might own a few assets, like a house that is currently unoccupied, or an extra room in your current residence that you keep locked up. Have you considered renting this realty out on Airbnb or taking in lodgers for a certain number of years? It is steady income that you can set aside in your online savings account. Sites like Airbnb can list your property and provide you with interested renters all year round, and you are free to set the price of the space as per the area, amenities and season of the year. This rental income can help you run your house, or you can set it aside for future goals. However, you may be taxed on it as per applicable Income Tax rules.
We hope these tips start you off on the journey of financial independence. Good luck!