Saving money is like going on a diet; it won’t work unless it’s a lifestyle change. When it comes to money, a lot of us are terrible at restricting ourselves. We claim to be saving up to buy that dream car but splurge as soon as we see a “For Sale” sign.

Today, the idea of saving is very different. Our essential expenditure includes self-care routines and internet bills. Our long-term goals are compared to others on Instagram. And all thoughts of self-control are thrown out because we can literally shop on our phones. In times like these, a reality- check is essential to realise that we should know more about saving money. 

We’ve all been taught that we need to save whatever is left after our expenses. But Warren Buffet, the fourth-wealthiest person in the world, says we should first remove the amount we want to keep from our salary and subtract our expenditure. For example, if I get a 100 rupee salary, I subtract what I wish to save, i.e., 20rs. THEN, I can use the remaining 80rs for my expenses. 

While this may not be the easiest thing to do for new-age working professionals, here are a few simple changes you can make to save for your next vacation…. I mean, emergency.

Make some Lists!

The first step towards saving is jotting down the things that need chunks of your salary. A few examples of the boxes are paying off debt (education loans, credit cards), bills, emergency fund, investments, savings and insurance coverage (if you decide to start early). 

Having this overview helps you stay organised and on top of your finances. Also, once you see it all written down, you’ll be too scared to overspend anyway. You can also choose to track your expenses through the month using apps like Walnut, ET money, Chillr etc.

Automate, mate

The easiest way to ensure you save some part of your salary is to automate your payments. This means that a portion of your monthly wage will automatically make it to a separate savings account. So, self-control will no longer take control of your saving habits. The “option” of saving is taken away from you.

An article in Forbes says that you should be saving 15-20% of your salary depending on your age and experience. But this can vary depending on your mandatory monthly expenses. Even if you’re saving a tiny portion, you’re still on the right path.

Ideally, this amount should be a Fixed deposit account- where you put tiny seeds of money and take home a plant after interest or liquid mutual funds- small investments that you can take out whenever you’d like. 

Plan your investments

By investing your money when you are younger, you reap more benefits for your future. Investing in Mutual Funds through a SIP (Systematic Investment Plan) can help ensure that you have a sizeable cheque waiting for you at the end of it. Don’t blindly listen to anyone (not even us) about where to invest. Do your research and understand every scheme before putting down your money. You also need as little as 500 rupees for your first investment, which makes it easy to start the process of investing. 

Manage your taxes 

When you start making more money, you also have to give it away; it sucks, we know. If you make more than five lacs rupees in a year, a large portion of your income becomes taxable, in India. Unfair, I know. Read up about the benefits of investing in ELSS (Equity Linked Savings scheme), ELSS (Equity Linked Savings scheme) or even life insurance. This helps cut down the portion of your salary taxable to help you avoid paying tax while also increasing your investments. 

Manage your debt

Make managing your debt a priority. While it’s tempting to take your credit card to pay for something you clearly can’t afford, it’s best to clear off past debt before taking on something new. 

Ensure that you pay your EMIs, loans and credit card bills regularly to avoid the stress of the additional late fee charges. 

Get Financial Help

It’s always a good idea to consult a financial expert when it comes to managing your money. After all, expert opinions are necessary no matter what you’re doing. Hiring a financial planner or asking someone in the field can help the process seem less daunting.

We all hope to eventually “adult” the right way and save a good portion of what we earn. While we’ve all been told to cut on smaller costs like our daily coffees, know that it must be aided with more significant lifestyle changes. By planning your finances over time, we can find what best suits our spending needs.