I’ll be honest – I don’t get a lot of cash handling. My husband manages the expenses and splurges for our family while I suggest what to do or buy (and sometimes the “How to” aspect as well). Per se, I barely interfere or assume any responsibility towards savings or any of the expenses. But just a few months back, my husband needed some money and to no one’s surprise, I had none saved. It rang in my head like an alarm and I decided to do something about it. I did some research, changed some practices and figured out 7 of these practical tips for saving and investing for homemakers like me, that do not have much of a stable source of income. So let’s go learn about saving and investing together, in brief, and I will share more when I have learned more.
Whether you manage the house expenses like groceries and such with cash or online payments, there is always a way to save a slice for a later binge. Here are some tips for Saving Money that I have been practicing and they’ve worked well for me.
There is no saving unless you know how much and on what items you have been saving. Start to record your daily expenses in a notebook/diary or in an excel sheet. You can add values like categories (grocery, eating out, etc) amount spent, etc. An excel sheet can also help you identify the frequency and other metrics to help you understand your expenses better.
Before you make a certain purchase, tally their rates on various sites before placing an order. You will be surprised how much of a rate difference the same item can have on different sites! For eg. I tally rates of the items on Blinkit and Big basket apps. On a minimum order of INR 100, Big Basket does not charge a delivery fee, whereas Blinkit does. But items are usually cheaper on Blinkit, than on Big Basket. So I fill up my cart and check the totals including shipping charges and am mostly able to save around 15-20% in each order. Add that up for a month, and that’s a straight 15-20% cut in you overall expense. So even if you spend Rs.10,000 on monthly groceries and food items – you would save 1.5-2k with this method.
Make a list of items you need before you start shopping. It saves you multiple trips to the store/conveyance fares/delivery charges towards multiple purchases sessions. Lists also help you stick to the items you ‘need’, preventing random strolling and buying things you do not need, or worse, you already have at home and didn’t remember.
Have you ever thought about the money you spend on bottles of water or random snack packs you buy8 on the way, because you did not carry them from home? I personally consider the expense of drinking water bottles absolutely futile. So, I carry my own bottles of water and bunch of snacks just in case the kids gets hungry. (It’s usually the husband though). Carrying the backpack may be a little uneasy, but keeping a bottle in the car and carrying just one along when you are out of the car should work well.
Similarly, carry reusable bags from home help preventing those tiny, invisible expenses towards carry bags at malls and shops (since plastic bags are banned in India, and you need to pay for bags from the store or carry your own).
Think of any such small items that you spend on uselessly, whereas you can simply carry them from home. Surprisingly enough, they can make up an installment in investments for a month!
Latest models of devices and appliances can have an intoxicatingly euphoric experiences for buyers, there’s no denying that. But it is also possible that the latest model just has some minor twists than the previous model and the price jump is pretty high. I’m not saying always avoid latest models – but considering a 1 step down model can save you big chunks of money.
Decide how much do you intend to save in a month and cut your expenses accordingly. Having a goal helps you be more consistent, so it is not like INR 1000 in a month and INR 200 in another. Consistent changes, yield consistent savings, yield consistent investments and results.
Set a goal as to what are you saving for and choose a plan accordingly. Are you saving for a diamond set? Are you saving for emergency expenses? Are you saving for your kid’s college fund or a foreign vacation?? Setting a goal, helps you save better and have more focus and ambition towards yours savings.
What is the difference between saving and investing, one may wonder!
The main difference between saving and investing is that Saving is like a great habit, but without investing it, you are just letting it sleep. Investments tend to lead your money to meet more money that makes more money!
Investing can often sound hard and complicated but different methods can bring out safer results. Here are some investment options that I have figured out and am currently using.
I find these to be my safest and easiest bets. I set a certain amount in my mind to save and invest in a recurring deposit every month. I invest INR 6000 a month. But instead of putting it in one Recurring deposit, I have split it in to 3 deposits of 1k, 2k and 3k. This helps me have the security and option to break any one recurring deposit in case of an emergency. It keeps my other recurring dep0osits safe and their interests compounding.
It is a low risk, low yield method of investing but it is easy to track and understand. I also link my bank account directly for an auto debit every month for my RD so I invest hassle free. All I need to make sure is that I have sufficient balance before the auto deduction dates. In a recurring deposit format, saving and investing goes hand in hand.
Every once in a while, especially after I come back from a visit to my mom’s place or say, one of my RD accounts has matured, I like to further invest the bigger chunk of money. Fixed deposits get better interest rates than recurring deposits, and have one single deposit at the start of the period. It then sits and multiplies in the account until it is time to mature.
Just like RDs, FDs are also a low risk, low yield method of investing yet easy to track and understand. Check your bank site for procedures and interest rates, and that is all the research you need.
SIPs are gaining high popularity since they tend to make a good multiplication of your principal amount. The money is invested by the agency in the market and thereafter it moves drastically high or even drastically low over periods of time.
SIPs are high risk investments, and if retrieved at the right time, they are very high rewards too. There are several plans which you may need to read well and educate yourself before you choose to risk your investments in an SIP. I have chosen a plan where I invest RS 5K a month and I plan to let it sit and multiply for atleast 10-15 years.
SIPs are subject to market risks and can have drastic graph movements so it is crucial that you educate yourself and study the plans carefully before you invest in it.
These are by far the most complicated type of investments. I call them complicated because they need a certain level of expertise before you dive in to it. So if you are not very keen on going into complicated methods, move on from these strategies unless you educate yourself really well. Even frequent investors tend to make mistakes that can cause major losses. SO a newbie like me steers away from these patterns.
Just like SIPs, these are subject to market risks and can have drastic graph movements causing losses or even gains in large numbers.
The difference between Saving and Investing may be vast, but they definitely go hand in hand. Use these tips for Saving and Investing and do share with me how it worked out for you. Do drop a comment about any tips you really liked or suggest one that worked for your Saving and Investing practices.
Credits: All images have been taken from pixabay.com.
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