How to Save Money - 15 Simple Ways to Save Money

Money doesn’t come easy, and what is more difficult is to manage it. Most of us have financial issues daily, whether it's a past-due bill or mountain of student loan.

Money is not everything, but money is something very important. Money helps us achieve our goals, basic needs, and supports. It helps us get some of life's intangibles - freedom or independence, the opportunity to make the most of our skills and talents, the ability to choose our own course in life, financial security. And on the other side, savings are looking pretty dismal.

At the end of last year, the personal savings interest rate in India, its lowest level in more than a decade that is 3.50% to 3.25%, but to make the most of your income and savings it's important to become Financially Literate.

There are plenty of methods to help you reach your money goals. Perhaps you don't even know where to start. Don't worry, we have you covered.

Here are the best practices and tips for personal finance, according to experts:

1. Track Your Spending

how to budget and save money
how to budget and save money

#trackyourespendings #spendings

First things first. If you want to save more money and spend less of it, you have to know where that money is going in the first place.

Online budgeting tools like Mint, EveryDollar, or Money Manager make it easy to track your spending.

Having a visual snapshot of your money spendings can help in better planning. The snapshot is the answer to questions like:

  • Can I afford it? or

  • Is this purchase going to bring me closer to or push me further from my goals?

The 50/30/20 budgeting method offers a great framework.

According to this thumb rule:

  • 50 percent of the earnings after tax should be used towards necessities such as rent, utilities, groceries, and transport.

  • 30 percent of the money should be spent on luxuries, clothes, or wants/desires.

  • 20 percent of the money should be saved and invested towards your financial goals such as paying down debt and saving both for retirement and for emergencies

2. Emergency Fund

How to save money: Emergency  Fund
How to save money: Emergency Fund

An emergency fund is an essential amount that you must keep aside to tackle emergencies. So, you must design it specifically to meet unanticipated financial shortfalls that may apply to you.

You should be able to withdraw the money when you need it and with no delay. At the same time, you should ensure that you do not get penalized in the form of an exit load or pre-withdrawal penalty.

Now, the obvious question is How to build Emergency Fund?

Say, you have decided to have an emergency fund of Rs.1 lakh. In this case, you can set aside Rs.5,000 or Rs.10,000 every month to accumulate the corpus you need. You can even cut down on your investments to build this amount.

How much should your Emergency Fund have?

Depending on your expenses, an emergency fund can be three to six months of your monthly expenses. For example, if your monthly expenses are ₹40,000 then your emergency fund should have ₹1,20,000 to ₹2,40,000.

Building a stable savings corpus requires you to consider multiple factors like your take-home salary, monthly expenses, and some other factors. As expenses become increasingly complex, your savings plan needs to be refined.

We have created a simple emergency fund calculator for you. Use it and you will get some idea:

3. Pay off loans with the Snowball Method

If your goal is to finally get out of your loans this year, you're already on the right track - when you pay off your debts, you free up your money for financial goals. There are two basic strategies for kicking debt: pay off your highest-interest-rate loans first, or pay off your smaller balances first.

While the first makes more sense mathematically pay off your highest interest rate loans. This is called the "Snowball Method".

Let me share a snapshot of Ramesh's loans:

As the interest rates of credit card and unsecured loans are higher than the other loans, so, first complete the last loan: credit card or unsecured loan. Keep the payment of other loans at a minimum, meaning pay only the fixed EMI.

Be logical about how you approach your debts.

4. Pay Yourself First

Pay Yourself First concept says whenever money comes, you should immediately put a certain amount into an account that you will set later to meet a long or short term financial goals.

How to become rich by paying yourself first
How to become rich by paying yourself first

#payyourself #selfgrowth

The idea is to always cut down a part of your salary and putting it aside before ​you spend money on other things. It’s easy to implement because you can automate it. Set up a recurring transfer or a recurring deposit (R.D.).

"pay yourself first" the golden rule of personal finance.

3 steps of paying yourself first:

Step 1: Figure out how much you can afford then decide how much to set aside.

Step 2: Set a personal payment goal. Look for ways to increase your payments to your savings.

Step 3: Create a savings plan. Start by moving money into a savings account once a month before you pay other bills or EMIs.

I personally like ICICI bank iWish. You can use this account (called Flexible Recurring Deposit) if you have an account with ICICI bank. The advantage is "No penalty with missed deposits".

5. Make Some Income from Your Money

Make your money do a bit of work for you by opening an account at your local bank and earning interest. The balance in your savings account earns interest because the bank uses your money to fund loans to other people.

In other words, the bank pays you to use your money. Keep an eye on the latest bank interest rates. You can use Groww app for checking the latest interest rates. Be practical when it comes to money not emotional.

6. Watch your Saving Grow

Do not save what is left after spending, but spend what is left after savingWarren Buffett

Review your budget and check your progress every month. Not only will this help you stick to your personal savings plan, but it also helps you identify and fix problems quickly.

how to manage life with less money - Watch your Saving Grow
how to manage life with less money

#Growth #Savings #WatchYourSavingsGrow

Understanding how to save money may even inspire you to find more ways to save and hit your goals faster.

7. Stop Smoking

It's certainly not easy to quit smoking, but if you smoke a pack and a half every day, that amounts to nearly 60,000 a year you can realize in savings if you quit. You must be wondering how?

1 pack of cigarette costs: ₹240 a regular smoker smokes 20 packs of cigarettes a month that is 250 x 20 = ₹5,000. For a year it would be ₹60,000.

If you put this money in a fixed deposit. You will get 6% interest on this money. Choose wisely.

8. Utility Savings

If money's tight, and you’re seeking ways to free up cash, look to your washing machine, hot water heater, ceiling fan, and thermostat for cost-saving inspiration.

Utility bills aren’t cheap. A lot of little things add up to big savings.


  1. Use ceiling fans to cut down on AC use.

  2. Open windows in the evening, then close lights and fans in the morning.

  3. Shut blinds against direct sunlight and doors and vents in rooms you aren’t using.

  4. Raise the temperature on your AC unit. Keep it off when you aren’t home.

  5. Clean your AC filter once a month.

  6. Replace traditional lightbulbs with energy-efficient ones, "If you replace a 60-watt lightbulb with a 13-watt CFL or 9-watt LED bulb, you are using only 25 percent of the energy".

  7. Turn off lights when you leave a room.

  8. Turn off and unplug power-hungry devices, such as TVs and computers, when you aren’t using them.

  9. When possible, avoid using your oven and stove, making cold dishes instead.

  10. Hang clean clothes on a clothesline to dry.

  11. Wash laundry in cold water instead of warm or hot water.

9. Pack Your Lunch

An obvious money-saving tip is finding everyday savings. If buying lunch at work costs you 100, but bringing lunch from home costs only ₹60, then over the course of a month, you can create a 1200 emergency fund.

10. Aim for a 10 percent savings rate

If you’re not sure how much you should be saving every month, aim for the 10 percent rule of thumb. "If you regularly save 10 percent of your income, no matter how much you earn, you will always have the confidence of knowing you are living within your means".

11. Don't mix money and friendship

Tips to save money - Don't mix money and friendship
Tips to save money - Don't mix money and friendship

#mixingmoneyandfriendship #friends #moneysaving

Have you ever been approached by a friend or family member looking for a small loan or opening a bank recurring deposit? This could affect your friendship or relationship negatively.

Before you agree, ask yourself a couple of questions:

Do you trust the person to pay you back?

Are you willing to risk a friendship if things go wrong?

Asking these questions may help you find some clarity. So if your answer is YES for all the above questions then only take the decision.

When emotions and money intersect, the effects can be financially injurious.

Emotions can cause us to overreact – or not act at all when we should.

12. Budgeting Tips for Students

The college years typically are a student's first steps into adulthood. Its the best time for financial literacy. It is never too early to start saving.

Tips to save money - Budgeting for Students - Student Loan
Tips to save money - Budgeting for Students - Student Loan

#collegestudent #student #budgetingtipsforstudents

Here are some tips to help you develop savvy saving habits today:


A single new textbook can cost several hundred Rupees, but often these items can be purchased used through such outlets as Amazon, Flipkart, on-campus bookstore, local book stores.

Make Coffee or Tea

Make your tea or coffee at home. It will help you save many bucks.

Take advantage of student discounts