Irrespective of how much you earn, you need to set aside some part of your income to kick start the investment process. It is easy to find money when you earn a lot, but what do you do when you earn less?
The only way you create savings when you earn less is to set aside a target savings every month and then, live with rest of the money.
So we are only reversing the age old formula here:
Instead of thinking: Income – Expenses = Savings
We do this: Income – Savings = Expenses
Why does it work?
That’s because, the savings part is executed almost like a forced discipline. If you seriously want to save a fixed 10% or 20% of your take home salary each month, you need adopt the above said approach to savings. This simple but effective trick was suggested by Robert Kiyosaki in his famous book ‘Rich Dad Poor Dad’.
So that’s the basic trick to find money!
But, that’s not all. You can also find money from many other sources. For example, Instead of going for parties and shopping, you can set aside extra payments like bonuses, commissions and so forth into your savings Fund.
So try to make it a habit to set aside a fixed sum as savings and live with rest. If you do that, you have a great chance to succeed.
I earn more, but still I fail to save …
That’s a very common scenario. The reasons could be – either your expenses are not controlled or you might have already got into the EMI trap by buying expensive gadgets. Since a solution to finding more savings from your income would depend on what kind of financial traps you’ve fallen for, what we can do is to suggest some tips which might be beneficial for you.
- Spend less: Sit back and analyse your spending habits and look where you spend more unnecessarily. Once you have identified certain areas of high spending, try to find ways to cut back.
- Prepare a budget: decide how much you’d be spending on various items every month and try to stick on to that budget. There are lot of mobile apps that would help you track your monthly income and expenses.
- Pay off high interest bearing loans: If you have a lot of EMI’s to pay, it naturally reduces your capacity to save more. It also shows that you’re living on high levels of debt which is not a right thing to do. If you have loans, first look for ways to pre-pay it as soon as possible.
- Keep control on your credit card spending: credit card is a kind of double edged sword. If you don’t spend wisely, you may end up spending more. Credit card companies slap huge interest for outstanding dues and delayed payments.
- Avoid buying on EMIs: Almost all the things are available on EMIs. The terms of the EMI scheme may look rosy at the moment of buying because at that point you are already in a self-gratifying mode and you will not want to do the math and find out how much you end up paying.
- No late payments: Any bills – like electricity / telephone / internet / credit card has a deadline within which you are supposed to pay the dues. Unnecessarily delaying such payments results in payment of fines. Such expenditures can be avoided if you can get organized on your bill payments. Make a list of monthly payments and the deadline within which you are supposed to pay. Credit cards over dues need particular mention here. Credit card companies slap huge interest and fines for delayed payments.
- Say no to impulse buying: Do not buy anything on impulse. Before laying your hands on any fancy thing which is up for sale, think if it’s really needed.
- Shop smart: Most of the big brands will be available at throw away prices once there’s an off season sale or sales promotion drive. For example if you want to buy an expensive watch, wait for the company to announce some discount offers. All the big brands announce discount offers at least twice a year.
- Compare prices: try to compare prices in different sites like amazon and flipkart. Also check out the same thing at the local shopping mall. Put some effort and get the thing you want at the best possible price.
- Keep distance from high rolling friends: If they are the problem, better avoid it! High rolling friendship circles often create pressures within us to keep up with them in all aspects. This may hinder your route to save money. They may be nice guys and may not harm you in anyway, but to keep up with them , it may become necessary for you to spend high ( for example latest electronic items or cars , parties, expensive dresses etc ) which otherwise may not be required !
So that’s some tips to find money to invest.
Quick bites to take home –
- Finding money is a matter of making it a priority.
- Pay yourself first and learn to live off with what is left. You will always have money with you. It may be difficult at first. But gradually, you will see your fund growing and that would encourage you to stick to it until you reach your goal of finding enough money.
- Bonuses and extra pays you get are opportunities to buy the latest iphone but a prudent option would be to create a savings out of it.
- You can save a lot of money if you control your expenses and automating your monthly dues.
- As time goes by, your small saving will also give you additional money in the form of interest.Take our word. It’s fool proof!!