Smart Ways of Saving Money

in Saving

With the slow down in the global economy, many people who did not save for the rainy day have been caught unawares and have seen their property slip away from their hands. So saving is a must. But how do you save? You may lament saying that I have to have these things to live comfortably, how am I supposed to give it up? Well, you have to if you do not want a financial crisis on your hands. Don't go to the movies, less entertainment, cut down on your coffee intake etc.

Managing money is an art and here are some tips for doing it without having to scrimp.

First, separate your savings plan into two categories: short term and long term. There is a difference between the two. Short term savings is saving for something that you want in the immediate future. Long term is practically for your retired life, when you no longer will be getting a salary or will be too old to carry on with a business.

The second, but actually the most important part of saving is budgeting. You have to prepare a budget. Preparing a budget is listing out all your sources of income, your salary, that of your spouse, rent if you are getting some etc. if you are in a job that gives you tips, that is also a source of income. Next you list out all your expenses, with reasonable provision for unexpected expenses like a sudden illness or some such event. If your spending is prudent you should have an excess of income over your expenditure. A larger percentage of this should go in as savings in a savings account in a bank. The left over percentage is to meet the additional expenditure due to inflation etc.

If you are not a prudent spender, then you will have to cut down on your expenditure. If you look around you will find that there are many ways that you can save just inside the house. Simple things like switching off the light when you leave your room to go into the kitchen to get a cup of coffee can make substantial savings in your annual electricity bill. Close the refrigerator door, don't leave it open; if you have a washing machine, wash with a full load.

The next smart thing to do is to spend cheap. With the Internet available in everyone's home, this is very easy. There are facilities on the Internet to compare prices. Buying cheap does not mean that you should compromise on quality. Some stores offer a bigger discount on the maximum retail price. It is just a matter of finding the right store.

Buying on the Internet has changed everyone's way of life from the consumer to the retailer. The exposure is wide, the competition is bigger. Stores mark down prices and conduct special sales and deals. Keep a sharp lookout for such sales. This is one big method of saving. Even a garage sale could turn up something that you need and you could get for a throwaway price.

Saving should become a habit. With the lessons learnt form the economic meltdown, youngsters who land a job should start saving from day-one. Putting aside a small sum of money shouldn't be that difficult. It will come in helpful in an emergency. And in your old age you can have a peaceful and calm retired life, financially independent and not a burden on others. At the same time don't become penny wise and pound foolish.

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Oliver S. Daniel has 1 articles online

Oliver S. Daniel is a Freelance Writer of a variety of articles and can be reached at jayasingh.daniel@yahoo.co.in. His website is http://www.oddjams.com/

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Smart Ways of Saving Money

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This article was published on 2010/03/31