It is often remarked that it is much easier to spend money than it is to earn it. That is very true in most cases. With daily life getting more expensive, and various ‘luxuries’ as they were called before, now becoming ‘needs’, whatever you earn is still never enough. Although there are various ways in which you could save your money so that there is always a security for your future, through investments etc, basic money saving can begin even when you are a child.
It does not take much to keep aside the odd penny or two. Money saving and ensuring that you have frugal expenses becomes even more of a must when you have something as huge as mortgage to pay back. Where does one start saving? What are the ways in which you can save? Here are a few tips, with everyday circumstances that could go a long way in adding to your savings
- Understand your Mortgage – It begins with knowing what a mortgage is. A mortgage is a loan taken to purchase property, which is paid back over the years, along with an interest. In some cases a repayment period could be 15 years and in others as much as 25 years. Being honest with yourself when it comes to your own financial standing is important. If you live in an imaginary world, and stay away from reality, you would only take that much longer to pay back. Know the terms and conditions before you say yes to a mortgage which includes understanding the interest rate, and the contracts that you sign. Always go for a mortgage that suits your needs and not your moneylenders needs. Remember that there are enough and more options in the market for everything. Lastly, see if you can afford a mortgage because of the long years it takes to repay it back.
- Clear your Loans – Do not ever take on a mortgage just to buy that pretty house before somebody else does, especially if you are already knee deep in previous loans that need to be cleared. Yes, although a mortgage does come with a house, it is still at the end of the day an expensive loan that needs to be cleared. If you do have many loans, see if you can get them cleared up first before taking a mortgage. There are some important reasons for this. Firstly, it would ease the monthly expenses towards clearing of all loans. Secondly, it means more money in your hand. Thirdly, a mortgage is a loan that takes years to clear up. Fourthly, any moneylender will do a full check of your credit history before he hands you the money you need. It is best to clear your loans while you still have a full time paying job and have years before you actually retire. Also once you have taken up a mortgage loan, avoid applying for any other loans.
- Do not overuse your cards – Along with the internet, banks gifted us a blessing by allowing purchases to be made with just a plastic card. Which is all the more reason to be careful if you are looking out for a mortgage loan. Studies have shown that people now spend more than they ought to, and more than they actually want to, because of the ease in spending. Very often, you are likely to pick up whatever you want and then worry about the bill later. That is where the trap is. Buying on credit simply means that either the money would be debited directly from your account or that, the bill will come to your house to be cleared up sooner or later. The more you use your cards, the more amount of money will again be spent in paying back, which will have a squeeze on your finances on the whole. So try limiting your plastic expenses. Making something as simple as a shopping list and showing a bit of determination would go a long way in adding to your savings.
- Looking out for cheaper Insurances – Taking on an insurance has now become a must. Everything right from cars, to houses, to even jewellery is now insured against damage, theft, destruction etc. While it is important to make sure that whatever assets you have are protected against unforeseen circumstances, going for a cheaper deal would be very effective. The emphasis is on the word cheaper and NOT cheap. Taking a cheaper deal would mean that your assets would be protected, but there might not as many facilities as other expensive insurances. You need to search the market properly and look for what suits you best.
- Avoid any risky financial decisions – When you have loans in your name to pay, it is not really the best time to put your money into ventures which you are not certain of, or to invest in deals that you have not invested in before. Investments at a time like this, should best be put into safe hands. The trick is to invest somewhere where the chances of any mishaps happening are less. For example, putting aside money into post office savings. Also, be aware of how much money you are keeping aside if any.
There are other ways in which you could save money too. Trying to get the best deals by booking train or flight tickets early, using public transport where possible thus avoiding overuse of the car , can also be done. Some other people might look at taking a hobby one step further by teaching it to others or taking classes for example by having painting classes. It has been found out that people spend so much on mere eating or drinking habits. Saving could begin in the kitchen. Trying not to waste food and recycling as much as possible itself could save loads of money. Getting rid of the gardener and mowing the lawn yourself could do your health and pocket good. The most important thing to remember is that there are always alternatives to almost everything. For every trip to the petrol station, there is the option of a bus, for every dress that carries a designer label there is a more affordable version and for an extravagant lifestyle there is always a healthier alternative. It is up to you to decide what really matters- clearing up your loans as fat as possible or remaining in debt for a lifetime.