Do you know what the secret to peace of mind really is? It is being able to live within your means in such a way that you also put something aside for a rainy day. But, not all of us can resist temptation as easily or in the words of Gertrude Stein, “Whoever said money can’t buy happiness simply didn’t know where to go shopping.” After all, those big sale days on ecommerce websites and even great discounts on food ordering apps could make spending a little extra to get those offers seem worthwhile.
The problem is that we don’t even realise when these little temptations can grow into a bad habit of overspending. In fact, 57% Indians have less than ₹5,000 in their savings account, says the most recent statistics from the Spending Behaviour in India 2016 survey by DealSunny. If this sounds familiar to you, here’s a look at what you can do to gain better financial control.
1. Set financial priorities
The first step to understanding what your financial priorities should be is to check what you spend on in an average month. For this, start by tracking your expenditure for a couple of months. Then look at your monthly expenses and separate your needs from your desires. For instance, paying rent is necessary, but you can save on a gym membership in case you do not visit it regularly. You can even exercise at home or go for a jog in the mornings to save money.
2. Create a separate account to pay bills
Set up different accounts as per your payment requirements. Apply for bank account online and use it to manage all your major payments, like electricity bills and rent. Use another for secondary expenses. Consider setting up automatic transfers from the checking account to other savings accounts or towards bill payments, so that you don’t have to worry about due dates. This way, you will be able to keep steady track of your spending.
3. Reduce your dependency on credit cards
With credit card payments, you could be in danger of spending more, since you don’t actually get an idea of the repayment amount at the time of spending. On the other hand, using a debit card or cash means that you cannot spend more than there is in your bank account. So, this automatically keeps your expenditure in check. Nowadays, opening a savings account, whether online or offline, will get you an ATM/debit card, at no extra charge.
4. Shop smart
Remember how you made a list of needs and wants in the first step? Use this to make a monthly budget. Secondly, shop like a broke, within your planned budget. Compare the prices of similar commodities and go for the more affordable alternatives, without compromising on quality. To prevent going off-budget, shop with a proper list of necessities. Unless the list is long, try shopping without a pocket overflowing with cash. Visit the sections of your necessities first and don’t get distracted by less important but attractive stuff. Check for offers and discounts to save money.
5. Keep receipts
Create a file to maintain all your receipts. They can constantly remind you of how much you’ve already spent on specific things over time. This way, you may not repeat spending on one of these things until necessary. This can also reduce overspending in a way.
Now, put the money you save through these steps in a savings account that offers you a good interest rate and see how you slowly build up financial security and peace of mind.