Are you Saving Enough Money?

“If you buy things you do not need, soon you will have to sell things you need.”

The habit of savings is a great teacher in itself. It teaches virtues like self-restraint, discipline, and foresight as saving for future goals involve a trade-off in itself since you forego spending and buying things today to be financially secure in the future.

Every year on 31^st October, World Saving day is observed all over the world. Previously known as world Thrift Day. This day promotes the importance of savings and learns more about the same.

It is an important day to encourage the savings of money or encourage people towards low expenses and want a nation to be economically satisfied.

World saving day gives a view of savings, but it expresses a controlled over unnecessary expenses. It is essential to be remembered for individuals as well as the country’s economy. Protection, as we all know, is necessary for every depositor who contributes to economic development.

World Thrift Day was first introduced in 1924 at the first International Thrift Congress in Milan, Italy. It was decided that the day will be marked across the globe to encourage saving money and restore the public’s confidence in banks. The day was established in 1925 during the 1^st International Savings Bank Congress (World Society of Savings Banks).

Earlier people were not sure about saving after the First World War, the idea was to make people aware of the significance of saving money. The savings banks operated with the school's support, offices, women’s associations, and sports to foster savings. The day gained prominence post Second World War looking at the evolution of the World in taking good care of resources.

Unnecessary waste of money people usually do

Some money-saving tips are apparent, like a flying coach, cutting back in eating out, or ditching expensive bad habits like smoking. Some ways are uncommon enough to be impractical for consistent savings like choosing cheaper hotels on vacation or buying a used car rather than a new one – great advice, but it’s not going to help keep your monthly expenses in check.

According to the Bureau of Economics – in the First three months of 2019, consumer spending is on pace exceed $14 Trillion by the end of the year.

There are several unnecessary wastes of money an average person doesn’t think about before spending.

Buying branded products - branded products-is one of the most underused ways to save money across various products. From food to skincare to over the counter medicine, chances are your local grocery or drug store has a store brand for them or sells a generic version. Check the labels; in most cases, the ingredients are pretty much identical, but you don’t have to spend money on the big brand names.

Paying full price for clothes – some cities have really great thrift stores or consignment shops for the pickier people. If there aren’t any near you, you can find plenty of sites that sell gently used, right quality clothes, as well as let you sell your own. Plus, by buying better quality clothes that have been gently used instead of cheap new clothing, your stuff will probably last longer. Cheap clothes break and tear, and then you have to buy more.

If you insist on purchasing clothing or shoes brand new, you still don’t have to pay the full retail price. Chain stores usually mark up the price of the clothes they sell so that you pay significantly more than what it cost to make the items, giving the stores a hefty profit. Rather than paying the full price, find the things you really want and keep an eye on them.

They’ll eventually be discounted or the store will have a sale that includes the item, allowing you to buy it at a better price. This is also an excellent way to weed out things you don’t actually love enough to buy, since you’ll have time to think about whether or not you really want the item while you wait for a discount.

Energy drinks

If you have an energy drink habit, it’s time to kick it of you want to save money. Those things aren’t cheap, and chances are you eventually have to start drinking more than once a day to keep the buzz once you begin to tolerate them. If this habit is due to poor sleep, think of the money your sleep habits are costing you as an extra motivator to change them.

Making more than one trip to the grocery store per week

An excellent way to make yourself stick to a grocery budget is to not allow little trips to the store throughout the week because you ran out of one or two items. Chances are you’ll end up getting something extra half the time, and a routine of more than one grocery store trip per week indicates you’re not properly tracking your grocery consumption and adjusting what you buy to fit your habits.

Pricey personal care products

We think we’re savvier consumers now, yet many of us continue to buy a bunch of chemical-filled crap to slather on our faces and bodies in the hopes that it will fix wrinkles (excuse me, “fine lines”), firm our skin, or brighten our complexions. I know it doesn’t work, you know it doesn’t work, so stop buying into it.

The struggle between instant gratifications, on the one hand, vis-à-vis long term happiness invariably ends in favor of us seeking instant gratification, more often than not. Our brain is programmed to respond favorably to short term happiness over long term goals. To make matters worse, our consumer-driven society encourages this and provides countless avenues for instant gratification.

We are constantly bombarded with marketing from one-click shopping, and credit card offers to bright neon billboards screaming out brand slogans and offers from rooftops. There is nothing wrong with buying things as long we genuinely need them and can afford them without jeopardizing our future. Most people err on this count and end up splurging beyond their means.

A few tips to enable savings are as under:

·         Restrict your credit card limit.

·         Walk to a mall with a list and try and stick to it.

·         Avoid leverage (loan) to the extent possible.

·         Save before you spend.

·         Make a household budget and study variance.

·         For youngsters, do not get influenced by peer pressure.

Once we actually start saving, we immediately face a curveball question, I.e., How much should we save? As simple as this question may sound, quantifying the amount of savings is easier said than done. While the exact amount that one needs to keep may vary as per existing net worth and financial goals, a simple rule of thumb can save one’s age. i.e., if you are 25, save 25% of your income. This implies that you save more as you grow older. Although this is a rough thumb rule, the logic behind it is that your time horizon to retirement reduces as you age. Secondly, your income increases over the years, enabling you to save a higher % of your income as you grow older.