Five tips for smart spending and saving habits

Everyone has limited resources to spend, and to reorient oneself, there is a need to change certain consumption habits. So curtail unnecessary expenses, invest in your health and save money for the essentials.

Although the Year 2020 did not given us many good memories to cherish, it taught us one thing and that is to be more mindful of how we conduct ourselves, including our consumption patterns. Certain habits inculcated among the investors during the past year should continue for some more time.

Think twice before shopping

With the lockdown imposed across the nation, people were forced to give up their habitual shopping spree plans. Losing that exciting rush of running from one shop to another made us calmer and more thoughtful on our purchases. This habit of thinking twice before we shop helps to reduce over-consumption and escalation of wants.

One In and One Out

As eliminating all spending on want items still feels extreme, one can start with the 'one in and one out' rule. Before buying a new items, such as a dress, couch or car, you should ideally sell an old dress or trade in your current car or post your couch on second-hand goods buy/sell websites. Mae it a point that for every non-essential item that you buy, get rid of one similar non-essential items as well. In this process, you will not only save your money, but also feel less guilty.

Curtail unnecessary subscriptions and memberships

If you pay any attention to your credit card/bank statement, you would probably notice certain items such as cable or satellite TV subscription, high-priced mobile plans, streaming services, digital newspaper, etc. All put together, these make a sizeable dent in your net income. So, consider each and every item and take a call whether it is worth the money that your are paying.

Saving for the future

With job losses and pay cuts across sectors, every working individual was apprehensive. This was an unanticipated situation for the firms as well as the employees, which forced everyone to hit the brakes on spending. People, especially those who belong to generation Z, are now more attentive to what and where they spend their hard earned salary/income. Consumption  is now more informed, and thought-through, to save for such future contingencies.

Caring for self

The pandemic period made everyone realize the importance of health. Caring for self is one of the key elements in minimalist living. This has reoriented the focus from spending on unnecessary items to health related products and services. Everyone has limited resources to spend, and to reorient oneself, there is a need to pay attention to the consumption habits and change them. This reorientation towards investing in health and health related products and services would prove beneficial in the long run.

            To conclude, being frugal is not the same thing as being cheap. Investors should note that by living frugally, one can maximize one's income and maximize spending to have the biggest possible impact on one's finances.