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How to spend less and save more

Figuring out ways to reduce unnecessary expenses and to spend less is often one of the biggest challenges in money management.

June 24, 2015 10:34 IST | India Infoline News Service
In personal finance, it is very important to track spending as much as savings and investments. Figuring out ways to reduce unnecessary expenses and to spend less is often one of the biggest challenges in money management. But that in turn can also be one of the biggest tools for wealth creation. Big savers are not necessarily thrifty, but they usually know how to spend wisely.
 
One of the best ways to accomplish the task of cutting unnecessary expenditure is by tracking your daily expenses. We often spend a lot of money recklessly and in an unplanned way. If planned those savings can work out to be a big corpus. Even though some of our regular bills might seem small and insignificant, their cumulative effect can be enormous – and become a huge drain on our resources. To minimise the damage caused on a monthly basis, many people look for ways to cut expenses that are both easy to implement and effective.
 
The simplest way to have a check on your spends is to know what you spend. And the best way to have a reality check on your spend is you keep a clean spreadsheet, which need not be on your personal computer but can be on a little pocket diary. Sitting down at the end of the day and counting the day's expenditure is a good thing to do, as it will keep you constantly updated if you are overshooting your budget and when you should slow down and where you are overspending.
 
Budgeting is important. It tells you precisely how and when your cost rise and how much of your income is going towards savings and investments. Individuals should start budgeting and tracking their expenses in order to be on top of their personal finances. Remember, no amount of savings and investments can create big wealth unless you have control over your expenditure.
 
Do check and recheck your bills and credit card statements, if not for overcharges, but to ensure if you are having to pay extra charges, fines or fee because of delay in payment or any other negligence on your part. Such charges may look minimal on a single bill, but together they can prove to be a huge outgo.
 
Preparing for forthcoming cash outgo is yet another way of cutting down on unnecessarily drain on your wealth. Is your child's school fee due next month? Is your car insurance due to renewal next month? When your is life insurance premium going to be due? Failing to keep dates with these outgoes can prove costly, in the form of fines, extra charges, an at time even due to cheque bounce fee if some payments overlap without you being alert.

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