Especially helpful for the younger generation.
Save 20% of your income in a separate bank account
Whatever your pay is, make it a point to save at least 20% of it monthly. It helps to have a separate bank account used solely for savings. When you have a “spending account” and a “savings account”, it makes it easier to not overspend as they serve very defined purposes.
The moment your pay comes in, transfer 20% to your savings account and forget about it, pretend it doesn’t exist. Don’t allow yourself to feel like it is an option to withdraw money from that account if you’re overspending. Keep it untouched unless in the case of an emergency.
Keep track of where your money goes
I know it sounds like such a hassle but if you don’t know where the bulk of your money goes, it’s harder to gauge which areas to cut down on so that you can save more. You can use an app for tracking your expenditure or even just writing it down – whatever works best.
Most importantly, you need to see the figures for yourself to understand how much of it is considered an unnecessary expense. Once you identify the “problem”, you’ll be able to come up with a more long term solution that works for you.
Prepare your own meals instead of eating out or ordering in
For many of us, food is a major expense. A great way to save money is by grocery shopping and preparing your own meals. It doesn’t have to be a major lifestyle shift, just start by making minor tweaks. For example, if you usually eat out or order in 10 meals a week, try cutting it down to 8 meals. Over time, the amount you save adds up.
Take public transportation
It’s more convenient to book a Grab or Gojek ride with just a few taps on your phone but it’s also more costly than taking the bus or train. It’s not that you can’t take a cab, just don’t do it multiple times in a week.
Don’t get a credit card
At the very least not until you learn to be responsible with your spending. The thing about credit cards is that you’re spending money that you don’t have. That in itself is a slippery slope. The money that credit card companies loan you in advance is not without a price, you need to consider the interest rates and what you incur when u miss payments.
Once you’ve established a good sense of financial discipline, you can consider getting a credit card as there are some perks like reward points and rebates on purchases.