The festive season – save rather than spend JAGJIT SINGH

This is where I have a role to play. If not checked, then I am sure some of you would financially break-down. So when I advocate to “save money rather than spend”, what are my Intensions...

Remember, if there is a will there is a way. Moreover, there are numerous ways through which one can pursue their savings pursuit in life. Although we need to accept that there is no single panacea by which you can achieve the goal of having accumulated enough savings to take care of your future needs.

This can be achieved not by a single action but with permutation and combination of various factors. So if you are looking for a solitary solution to address your savings need, then it is futile to search for it, as it does not exist.

So when I say “save money rather than spend”, I feel duty bound to present before you some effective ways to save and the list goes as follows: Know your expenses: Disposable saving for any person is arrived at when total expenses for a period [whether monthly or yearly] is subtracted from the corresponding total income attributed to that period.

Often it is observed that we focus too much on the income part and ignores the expenses side, without clearly understanding its importance.

If you know your expenses well, then you can easily identify which one is essential and which one falls in the category of luxurious or non-essential nature. You can enhance your disposal savings just by controlling expenses which are marked as “non-essential”.

Pay yourself first: In simple terms, “pay yourself first” means - before you pay any of your bills whether relating to grocery, entertainment, car loan, personal loan or making payment of any other nature, please pause for a moment and set aside a portion of your income to save.

The first bill you must pay each month should be to yourself alone and nobody else. This habit, if developed early, can help a person to build tremendous wealth during his/ her lifetime.

It is not as difficult as we think it to be. Remember; when you set down to pay your bills of different entities, the first cheque you must write should be to yourself only. Avoid impulse buying: Make a list before going for shopping.

They call it impulse buying for a reason. Humans simply have a very tough time resisting the temptation to purchase extras while shopping. Without a list you will buy items that you simply do not need.

Even worse is when you forget to purchase the actual item you came to the store in the first place. Getting all that you need in one trip can help avoid another unnecessary trip and further temptation to buy more.

Pay off your debts: World wide it is a universal practice that banks normally charge interest on borrowings at a higher rate than what they pay to the customers on their deposits.

So if you are servicing a debit which is inviting interest at the rate of 15%, then it makes lot of sense to utilize your entire disposal income on servicing of loan rather utilizing part of this money to put deposits which may earn interest at the rate of 10%.

Thus, your first priority should be to achieve a debt free lifestyle by paying off all your outstanding loans. Control the menace of plastic money: The mere presence of a “Credit Card” in our pocket tempts us to spend more, as we feel there is no requirement for upfront payment.

But at the end of the day this is in any case going to be the part of our expenses. Therefore when we wade around with a credit card in our pocket, we need to behave more responsibly so as to avoid any unnecessary buying through simple use of a credit card.

Invest in your career – improve your skills/ competence level: We know there are professionals who command a very high price in the job-market, while on other hand there are also people who struggle to earn a small fraction of what the so called highly paid professionals make. This wide gap represents their respective skills or competence level.

Thus one of the ways through which we can enhance our potential to earn more is by continuously improving our skills or competence level. Often we make the mistake of saving money at the cost of improving our skills. As learning is a continuous process, so never shy off to learn something new even at a cost, which is nothing but a long term investment on your part.

This list can go endlessly long but I need to conclude at some point. Remember, times are tough, money’s tight, and nobody should be spending more than they need. If you think you’ve exhausted all avenues for saving a buck, apply the above stated simple techniques and I am sure the end result would be different.

What basically required is a firm commitment on your part. Are you ready to pledge your commitment, if yes, the success is guaranteed.

Cheers and enjoy the festive season.