9 ways that teach not only to earn but also to save

 9 ways that teach not only to earn but also to save

Many people run out of money at the end of the month because they fail to make a habit of saving 10 to 20 percent of their income.

By making a monthly budget and tracking their expenses, unnecessary expenses can be reduced and savings can be increased.

It is necessary to have an emergency fund equal to at least 6 to 12 months of expenses.

Most people's income runs out at the end of the month, and their savings reach zero. Why is this the case? Because many people do not know about the general strategy for saving money.

Saving money and increasing it by investing it in the right places has become an essential thing for everyone these days. If earning money is a skill, then saving it is also an art. Therefore, if you can follow some small regular habits and rules, you can save the money you earn. And, this will change your financial situation.

What to do?

1. Mandatory saving of 10 to 20 percent of your income

Many people have the habit of spending first and then saving. When you have money with you, you never know when it will run out. If you can make it a habit to set aside 10 to 20 percent of your salary or income on the day you receive it, you will not have to regret it in the future.

This amount can be kept in a fixed deposit or savings account. If this is done regularly, a large amount can be accumulated in 5 years. This is the most basic and effective way.

2. Making a monthly budget and tracking expenses

You can make a clear budget of how much you earn and how much you spend each month. If you do not have a mobile app, mobile wallet or money manager, you can write down your daily expenses in a simple notebook.

This habit of noting can reduce unnecessary expenses such as daily eating out, online shopping, and purchasing unnecessary items. It prevents uncontrolled spending in terms of budget and increases savings. In Nepal, 40 percent of the average family's expenses are on food, which can be reduced by cooking at home. This habit can save 10-20 thousand per month.

3. Emergency fund

At least 6 to 12 months of expenses can be kept in a place where you can easily withdraw them. By doing this, this fund reduces stress in case of job loss, illness or sudden large expenses. Health expenses are expensive in Nepal, so this fund has become mandatory. Without it, there is a high risk of getting into debt.

4. Stay away from unnecessary loans

The habit of buying expensive phones, laptops, and cars that are not necessary for daily work through credit cards and personal loans will drain your savings. It is advisable to take loans only for essential things like housing and education and plan to repay them quickly. In Nepal, the interest rate of banks is 10-15 percent. Taking out loans will cost even more, which will widen the debt gap. A debt-free life gives peace of mind and makes it easier to focus on savings.

5. Start regular savings with a small amount

You can start saving even if it is 5,000 or 10,000 per month. Even a small amount will provide the benefit of interest over time. In Nepal, you can start with 1,000 in mutual funds through SIP. Regularity is the key to success.

By saving little by little, you ignore how much you will save, but starting small will form a habit and reduce the pressure. This habit will save millions in 10 years.

6. Adopt smart ways to reduce expenses

Save electricity/water, get cheap internet packages, cook at home, buy second-hand goods. If you are involved in any unnecessary organizations by paying regular fees, you should get rid of them. These small things can save 5-15 thousand per month.

In this way, daily expenses can be reduced by 40 percent. Make it a habit to look for discounts in online shopping, compare prices in the market. In this way, savings increase without reducing the standard of living.

7. Increase financial knowledge

Books that provide financial knowledge, YouTube content, and understanding about shares, SIPs, and FDs in Nepal reduce the risk of losing money. Many people suffer losses due to lack of knowledge. Spending 1-2 hours a week to learn increases confidence in investing. This will become the biggest asset of investment.

8. Make a financial plan with your family

You can explain the importance of budgeting, savings, and goals to your husband/wife and children. If your family supports you, it becomes easier to control expenses. In many families in Nepal, only one person makes a plan and it fails. It is good to save together and set goals. Such collective efforts bring success faster.

9. Reinvest the profits earned

Reinvesting the interest/profits earned from investments makes money grow faster. For example, a 10 percent return doubles it in 7 years. In Nepal, this works magically when you have knowledge about FD, SIP and shares.

With patience and consistency, repeating this regularly can make you rich in the future. This can be the last and most powerful tip to save money.