Earning a decent income but keep finding your bank account empty by the end of the month? Is inflation getting the better of you, making it tougher for you to buy the things you desire?
A majority of us think that we are aware of where our money goes. Often, this is not the case. We keep track of our big expenses, but’s it is the little hard-to-notice leaks that drain our finances. We do not pay attention to these little costs, but they can suck away a lot of money in the long run.
Often, we also neglect budgeting. Keeping track of our expenses – even the little ones like energy costs, telephone bills, entertainment, and eating out – can make a difference to your long-term savings.
Following are some tips and ways to save money on your monthly bills. They may seem elementary, but they can be very effective.
Record income and expenditure
We often do not maintain a record of our revenues and expenses. But keeping a journal is a fantastic idea to control our monthly spending. It helps to know how much we get and how much we spend on a monthly basis. This way, we can identify a pattern after, say, three months as to where the money is spent mostly and help in curbing such expenditure.
Differentiate between ‘need’ and ‘want’
Need is something which one cannot ignore. Focussing on what we need first rather than what we want helps in saving money as well. Even if you end up compromising on the standard of living, it is a good step to make sure you fulfil all your needs rather than your wants. Once you achieve your goal of saving and find ways of increasing your monthly income, you can get back to maintaining the desired standard of living.
Making a monthly budget
You might be keeping a journal of revenue and expenditure, but if you lack a monthly budget, you will not learn to prioritise expenses. A monthly budget helps you to be clear on how much to spend and on what. For instance, if you make a budget of a particular amount for shopping, you can identify the excess purchasing amount and hence limit your shopping. Likewise, you can monitor and limit unnecessary expenses.
Deduction in energy costs
The energy used on a daily basis is yet another thing that is often ignored. During summers, the use of fans and ACs are the maximum, and during winters it is heaters. Switching off such appliances when not in use and turning them on only when in real need will help in the deduction in energy costs.
Change your filters (any appliance that cools or warms around your house) on a monthly basis so that energy efficiency of the device is not lost. Monitor your house before stepping out or sleeping. Check if all the lights, electrical appliances, television, etc. are switched off. Switch to LED and CFL bulbs. Using such bulbs will make your house energy efficient than if you use traditional bulbs.
Reduce telephone bills
Avoid extra fees and charges of your cell phones; this will keep your bills at a minimum. Check out if you are paying for the services you are not using like music downloads, music, etc. Stop such services immediately. Look out for a good plan that is beneficial for you. For instance, if you make more long distance calls, you can check out plans like free night calling, weekend bonuses, etc. The other option to cut your phone bill is switching to pre-paid plans. Besides, using internet telephone service is a good option if you make long distance calls regularly. You can be in touch with your loved ones without burning a hole in your pocket, just at a nominal internet bill.
Deduction on entertainment
Entertainment and lifestyle choices are expenses and do not offer any returns on investment. It’s best to curb these to the maximum. Check if you are subscribing to channels which you do not watch. Call your cable operator and ask for the elimination of such channels. Opting for a lower package is yet another way to deduct entertainment costs. Check out if you are paying for any club memberships that you do not use regularly. Look out for cheaper or free entertainment options. Cancel subscriptions to newspapers or magazines that you seldom read.
The author is CEO, BankBazaar.com