10 sure-shot ways to save money & improve your finances

One of the quickest ways to improve your finances is to reduce your spending and find more ways to save money. Unfortunately, there are still many people around who find it difficult to save, most of the times putting the blame on their 'insufficient' income. This is, however, not true as various studies have already proved that how much you save has little to do with how much you make. 

If you are also among those who usually find it hard to save, there are some innovative and sure-shot ways which can help you save more and also improve your financial health in line with your goals. 

Here we take a look at some of them: 

1. Stick to the budget: One of the surest ways to cut your spending and save more is sticking to the monthly budget and resorting to forced savings. This system always works, regardless of the kind of job you have or your income. 

Giving an example, Lovaii Navlakhi, MD & chief financial planner, International Money Matters Pvt Ltd, says that he knows of a client who segregates her monthly expenses in envelopes, for example, for groceries, eating out, fuel costs for two wheelers, etc. If the family decides to go out at the end of the month, the venue is dependent on what amount is left in the 'eating out' envelope. Similarly, the children may resort to travelling by bus if the 'fuel costs' have run out. This way they are able to budget their expenses and save as per their goals.

2. Take a 'no buy' day or week: Another important way to help with saving money and keeping a quality budget is 'spending freezes'. This means for the entire time of the 'no buy' break, you aren't allowed to buy anything new, or to go shopping. Exceptions to the 'no buy' time might include paying for medicines, food and emergencies that come up like a car breaking down. "Save the money you would have normally spent during the day or week you are on the 'no buy' break and invest that amount by the end of the month," says Navlakhi. 

3. Avoid buying on impulse: Do you often purchase something and then get it home to find you aren't excited about it any longer? It happens with most of us. Therefore, if you are in the habit of spending on impulse, make an effort to have a moment of reflection before buying anything. "If you see something you would like to buy, try waiting a day or two before actually committing yourself to buying. If you really want it, you will come back. This will not only help you save more money, but also give you the chance to find other things that may be better," says Atul Surana, certified financial planner and MD of Mangalore-based Catalyst Financial Planning. 

4. Avoid spending by habit: Quite often a lot of our spending is a daily habit. However, this spending could easily be unnecessary. For example, if you buy a takeaway coffee everyday for your office staff / visitors, why not invest in a coffee machine? "Just because you spend Rs 200 a day on lunch, doesn't mean this habit has to continue for ever. Try taking your own lunch. Re-evaluate all your habitual spending patterns and decide whether it is necessary," says Surana. This will help you cut your unnecessary spending and save more.

Source : The Economic Times, 24 Nov 2012