Financial Wisdom: 5 Practical Ways to Save Money

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Another year has gone by, and a new year is just on the horizon. And like every other year, this time too, you may already have a long list of resolutions you want to adhere to in 2022. Perhaps you want to travel more, or maybe, you want to buy the car of your dreams this year. Whatever your goals may be for the year ahead, there is just one secret to achieving them - and that is to manage your money well.

Good personal finance starts with one simple, yet hard-to-master habit. The habit of saving money. If you’ve always wanted to do this, but simply had no idea where to begin, we can help you out.

Here are 5 easy and practical ways to get better at saving money this year.

1. Cancel unused subscriptions

You may have many subscriptions and memberships in your name. A big part of this is likely to be OTT subscriptions like Netflix, Amazon Prime, Discovery+ and more. You may have liked a particular program or show on some of these platforms and may have decided to subscribe to them for a short period. However, if you had opted for auto renewal of your subscriptions, you are probably paying for services that you are not using.

This also applies to product subscriptions, gym memberships, club memberships and just about any other subscription that you may have purchased on a whim. But if you are not using those services or products regularly, you can save a ton of money by cancelling these unused subscriptions.

2. Cook your meals at home

Eating takeout at thrice a day every day of the week? That may be where a major part of your money is going. A healthy and more cost-effective alternative would be to cook your meals at home. If you’ve never cooked your own meals before, you could always start off small. Maybe try a new recipe every weekend? Or make dinner every day, even if it means eating takeout for breakfast and lunch?

Small changes like this can help you save a lot of money each week. And what’s even better is as you make the switch to healthier homemade meals, your health also improves. This translates to savings in medical bills over the long term.

3. Cut down your discretionary spends

Here’s an exercise for you to do. Make a note of your daily expenses throughout the coming month, and at the end of the month, run through your expenses. Mark the ones that were absolutely essential, and the ones that were more impulsive than necessary. If you have a lot of expenses in the second category, that means it’s time to cut down on those discretionary expenses.

The inessential expenses in your budget can prevent you from saving up for emergencies and for other essential goals in life. So, if you are just getting started on your savings journey, it can help to only focus on the essential spends.

4. Take advantage of discounts (only if you need the product)

If you have any coupon codes or reward points, make sure you use them for the products and services you need. This can help you save money in some unexpected ways. And every penny saved today can add up to big results tomorrow.

However, keep in mind that sometimes, discounts can be the enemy. It is easy to rationalize spending on a product if it’s on a half-off sale or if it comes with an attractive discount coupon of, say 40%. You may justify the expenses by saying you saved 40% or so on the cost. But the truth is, if you don’t need that product or service, all the money you spent on it is an expense.

Additional Read: 5 books you can read today to save money for a better tomorrow

5. Automate your savings

And lastly, even if you have trouble following any of the ideas above, there’s one easy way to start saving up for the future. You just need to automate your savings. Check if your bank account supports automatic scheduled fund transfers, and ensure that each time your income is credited, a percentage of it is immediately transferred to your savings account.

This way, even if you slip up and spend impulsively or forget to cancel a subscription or two, you can rest assured that a portion of your pay check has already made it into your savings for the future.

Summing up

These are simple habits that you can easily incorporate into your everyday life this new year. And before you know it, you may be saving a lot more than you expected. Budgeting also helps, especially if you have a multi-income household. Having two or more incomes may bring on a false sense of security, leading to unintentional but excess expenditures. So, take an hour or two this year and draw up a budget for 2022. And while you’re at it, make sure you include the tips above to save more money this year.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.

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