How to Save Money – Secrets You Must Know gives you the simple, but easy to implement money saving secrets. These tips will help you to make considerable savings. Our focus is to provide tips that make a substantial difference and help you save 40-60%, and possibly even more. We call these tips, the secrets. The initial feeling that you may have on these tips may not be great. But, when you implement them, you will definitely see a big and long term savings that will change your financial situation.

Some money-saving tips are in vogue, and they will help you save 2-5%. But, they are not enough to make a big impact on your financial situation. Additionally, they could take much of your time to implement them, as they are not really practical. Such tips would make you penny wise and pound foolish.

Saving money is very important to gain financial stability. But, unfortunately many of us don’t know how to save money, as it is not taught in schools or colleges. This article will be very helpful, if you are really interested to know how to save money.

Secret #1 – Pay yourself first!
Keep a portion of your salary aside for savings, as soon as you get your salary. It is better to prevent losing your savings rather than trying to stop spending. It is easier and less stressful too, and it also works off your positive energy.

Here is the explanation. As soon as you get a salary at the start of the month, move a portion of it into another savings account; this money could be a variable portion of 10% to 30% of your salary. Of course, you can also make an automatic payment into a Recurring Deposit (RD) account.

The secret here is – the human motivation to not lose is up to 5 times stronger than the motivation to win. Once you make the commitment to pay yourself first, you are now working with stronger human motivation not to lose money (that is working in your favor to help you save money). You will question yourself strongly, “Is this really required?”, when you have set aside money as soon as you get your salary and try to take a portion of that to buy something. This happens for obvious reasons, because, by doing so you are taking away money from your wealth to pay something that may not be required and will reduce your hard earned savings.

Secret #2: Shop intelligently
You can never stop shopping for your genuine needs. However, such shopping should be done intelligently. Be careful to think whether you are buying household purchases from a supermarket or expensive items like home, motorcycle, a car or consumer durables. Shopping intelligently would surely help you save a lot of money, without depriving yourself of any genuine needs.

You should buy an item only when it is really needed. However, in general, many people buy things even if they don’t actually need them. Some people buy to show-off their status, some for the sake of experience and some to have a feel of being superior. Buying things make you feel good about yourself just for a few hours. People often shop to feel better about themselves, they are addicted to shopping and later they find it really difficult to save. It is better to stop your shopping addiction to save money, because, those who know how to save money are those who know how to shop intelligently.

Secret #3: Understand the difference between fancy lifestyle and being rich
Being wealthy is different from having a fancy lifestyle. One of the major reasons that many people don’t save enough is the lack of awareness about the difference between a fancy lifestyle and being wealthy. No sooner people have a little surplus money than most people start increasing their spending habits to have a more lavish lifestyle. After all, they could not afford some things earlier, and why not buy things that they wanted previously, once they can afford now?

The most common thing which most people don’t know is – wealth is the number of years you can live without earning a single rupee, based on your current living expenses. If your living expenses decrease, then your current savings will make you wealthier. Similarly, if your living expenses increase, then you become less wealthy.

There may be many rich people. But, of all the wealthy people, only those who have a fancy lifestyle catch our attention. Of course, most of them prefer having a fancy lifestyle and may become less and less rich with each passing month. From the other end, the steadily rich, live below their means and avoid fanciful lifestyles. Such steady rich people do not come into limelight and hence do not catch our attention. For example: many small time entrepreneurs buy expensive cars like Mercedes Benz, Audi and BMWs, while smart wealthy people won’t. Narayan Murthy of Infosys fame with a net worth of Rs.7, 000 crores uses a Skoda. Azim Premji of Wipro, whose net worth is Rs 85,000 crores drives a Toyota Corolla. These examples can be used as an eye opener to many entrepreneurs who spend lavishly instead of saving a portion of it.

Yes, when you cannot afford to buy something which you would like to own may make you feel emotionally inferior. However, when you can afford buying something, but you voluntarily choose not to buy it, that shouldn’t make you feel bad. Because deep down, you know that you can buy that particular thing anytime you want.

Secret #4: Open a separate account for your “saved money”
It is always better to have a separate savings account for your “saved money”. It ensures that you will not use the money for your routine expenses. This process has an advantage over keeping your saved money in your regular savings account, because, you will have to spend too much time in reconciling the accounts to find how much money you have saved and how much money is towards this month’s expenses. Sometimes, even unknowingly you will spend your saved money, for you may not realize that you are using from the saved portion of your bank balance.

One good idea! Prefer not to have a debit card or ATM card for this “saved money” savings account. If at all you need the money, you can use online banking to transfer from your regular bank account from this designated “saved money” bank account. This will clearly maintain records of using saved money.

Not having a separate account will not let you know how much balance you have for regular expenses like rent, phone bill, electricity bill etc. and how much money you have set aside for savings. As a result, you are very likely to use money from what you have saved for towards the current month’s expenses. This is likely, because, you think that you have not spent the full amount from this month’s salary or budget.

What next?
Now that you are aware of the secrets of how to save money. Just remember the quote, “to know and not to act is not to know”. Now, you have to make a commitment to use these secrets to save money, as much as your current income will allow. One of the abilities of self-made rich people is to save aggressively. If you build a habit of saving money, you will most likely accumulate a lot of wealth.

Now that brings us to one thought that may be lingering in our mind. Is it worth doing? It may give you a feeling that shopping discipline and avoiding fancy lifestyle looks like avoiding fun. One of the treasured things that people with lots of saving have is peace of mind. While those who are not financially intelligent are always stressed by money. This happens many times, even after having a very good income. So, finally the big benefit of saving and living a financially sensible lifestyle is about peace of mind, reduced anxiety that allows you to enjoy life to the fullest.


“Learn perfectly all that you learn, and thereafter keep your conduct worthy of that learning.” — Tirukkural 40: 391


6 comments on “How to Save Money – Secrets You Must Know”

  1. Nice article! Thank you!

  2. Nice One.

  3. Very helpful.

  4. Anonymous says:

    Good one. Thanks.

  5. Very Nice…

  6. Impressive piece of writing. keep it up!