Money is an essential element in every body’s life. It is the one that
we exchange to get all the necessary things in life. And that is
exactly the reason why we work all day and sometimes night. Since the
flow of money in one’s life is not uniform, it is only prudent to save
some money for the crunch days. Economics permits one to spend his/her
money in any amount as he/she wishes. But how rationally one could plan
so as to maintain a minimum level of backup in any given day is
directly linked with his/her ability to save.
In daily life, even if we know that we are spending money to buy things
we need, most of us tend to over see the fact that more than 50% of the
spending is for purposes that are quite unnecessary or those
expenditures can be avoided without affecting one’s basic life style.
Exactly this is the point from where one should start thinking of
saving money.
Distinguish between and clearly understand your needs and wants. Needs
are those things one require to sustain his/her basic needs. Want on
the other hand refers to anything that is not an absolute necessity but
which presence enhances one’s way of life. For example, a car can be a
need but a $40,000 SUV is a want.
It is a human nature to insist on the best and the biggest even if the
same quality is available at a lower cost. Spending $100 in a posh
restaurant when one can afford the same sumptuous meal at $20 or buying
a $20 shirt with a $30 trendy label attached all belong to this
category of “keeping up with the Joneses”. A bit of intelligent
spending here can save a lot.
It is a good idea to try a commodity and get a feel of it before
actually buying one. Because there is no point in buying something you
may never use or hardly use. Such an analysis is relevant especially
when the item under consideration is a costly one. Rent one, borrow
one, and try one out before making the final call.
Mortgages can easily be the biggest single expense most families have
in their monthly budget. Here, zeroing on the best deal is where the
trick lies. Calculated comparisons can make a difference of few
thousand dollars in the entire deal. Another big expense is linked with
the vehicles a person owns. One should see if he/she is getting the
best deal on the maintenance, insurance and repairs.
True, food is a need as well as a recurring expense. Keeping a check
over the money spend on food – to a necessary extend - can make a big
difference in the money one could save at the end of the month. Plan
food purchases in advance, go for generics or store brands and stock up
the items that you regularly use when available on sale.
Another expenditure that drains a lot of money is one’s fascination for
clothes. Unlike electronic goods, the price of clothes is continuously
on an upward spiral. Hence it is a good idea to buy quality clothes
that lasts a longer period. Such clothes are better than the ‘throw
away’ types. The cost of clothes is not going to come down either.
Therefore, buying in advance for a season ahead is a logical correct
step. But never over do it. Getting clothes for 5 years in advance is
stupid!
Telephone is a common thing in every house hold. This is one department
where money drains like an open tap. Though local phone service has a
fixed price long distance calls matters. Shop around to find out the
best deal as far as the service provider is concerned. Keep in mind, a
saving of $16.75 a month can add up to $200 a year.
If you are a travel addict, travel expenses can make a big difference
if not having the right travel agent. Even if it is the same place,
airline, hotel or car rental, the difference between two travelers can
easily exceed $1000. Keep one’s eyes and ears open when hunting for a
traveler.
Remember, saving money is not putting all the dollars that one earns in
his/her savings account. But it is all about intelligently spending the
bucks, at the same keeping a check on all the unnecessary expenses.
Good Luck!
