Why is there a need to increase savings?
The corona epidemic has caused considerable damage to the economy. It has also affected the economic condition of the people. Many people lost their jobs in this crisis, then all had to face cuts in salary. In such a situation, it is important to keep the expenses under control and increase the savings. Here we are telling you some ways by which you can increase your savings by reducing your expenses.
Drop the love of the brand
We love branded products because they believe in quality. However, it also has to be paid more. Experts often say that branded products are often bought without comparing what additional benefits they are offering. Pay a higher price for brands only if you are clear that they are giving some additional benefits. Most major retail chains and online portals offer generic products at low prices. These are known as in-house brands. These generic products are more likely to be of good quality. The reason is that these retail chains and online stores are under pressure to save the image of the mother brand. To ensure that they are selling good quality products or not, you can order them in small quantities first. They can be used after testing.
Use Credit Cards Correctly
Credit cards are often said to be the biggest reason behind outrageous spending. However, this card offers many types of benefits. The condition is that they should be used properly. Since the payment cycle often comes 15 days after the end of the credit cycle. Therefore, a credit period of about 15-45 days is available for every purchase. In real sense, credit card is a facility given by the bank, which allows you to spend money first and pay it later. You can pay online or offline with a credit card. If you do not pay the credit card bill on time, then you have to pay a fine on it. At the end of every billing cycle, you must pay the minimum bill amount. There is a debt-free period between the credit card bill generated and the purchase. If you pay the full credit card bill on time, then you do not have to pay any penalty. Your credit score also gets better. If you do not pay the credit card bill on time, then you get a deposit of interest. Many times there is a late payment on the outstanding amount and also on the finance charge. Many offline and online shops offer discounts on certain types of cards. However, one should not shop unnecessarily to get these offers. Credit cards also offer reward points. By collecting these points, a product can be purchased later.
Apply 10-day rule
You can avoid unnecessary purchase by making shopping list. Therefore, it is good to make it before going to the mall. Since people go to the mall these days, it has reduced. Therefore, a method can also be adopted to avoid spending wildly in online shopping. In this, you can decide that you will stay for 10 days before making any major purchase. The advantage of this is that if the mind changes later, the same money can be invested elsewhere. This is a very effective way of saving and spending.
Keep the telecom bill under control
Your telecom bills must have come down in the last one to two years. Competition among telecom companies can be attributed to this. If this has not happened, then you definitely need to curb it. It is possible that you are still using very old plans. The cost of electricity, telephone and internet can increase due to work from. It can also increase due to Amazon Prime, Netflix. It is not that you stop them all. However, you can save significantly by retrenchment of those who provide these services.
Curb rent
For those who live on rent, there are two ways to reduce the cost. The easiest of these is to shift to another house. SEBI Registered Investment Advisor Harsh Roongta says that most people are working from home these days. This trend is expected to continue. In such a situation, a cheap house can be taken at some distance from the expensive house located close to the workplace. In remote areas, a good home is available for less money. Another option is to ask the landlord to reduce the rent. They can be said to be temporarily correct but the rent should be given relief. If you have a good relationship with your landlord, then this option can definitely be thought of.
Reduce interest cost
For example, rent is a big expense for those living in rented houses. In the same way, the EMI of a huge housing loan is a big expense for the people living in their home. At the same time, loans such as cars, education, personal loans, etc. also increase the burden of interest. Your first step should be to clean all the expensive ones. For this, the gold locked in the vault of the house can also be used. Gold loan rates are generally lower than personal loans, car loans, etc. With this, expensive loans can be removed.
Correct insurance portfolio
This is not the time to reduce the insurance cover. But, with expensive endowment plans and old-time ULIPs, one can shift to pure term plans. A lot of money can be saved by doing this. Insurance cover can be increased with the remaining money.
Reduce Mutual Fund Expense Ratio
Of course, this step will not affect your expenses and cash flow immediately. But, by restructuring the mutual fund portfolio, reducing the expense ratio will benefit in the long term. There is a great difference in the cost of direct and regular plans. If your distributor sends you updates regularly, then keep up with the regular plans of mutual funds. The index expense ratio of index funds is even lower. Shifting to index funds with the direct plan of actively managed funds can lead to a huge saving in annual costs.
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