Creative Ways to Save Money on a Tight Budget — II

5. Use the Savings Bucket Strategy

A savings bucket strategy is when you have multiple savings accounts or savings buckets so you can very clearly see your financial goals. I have anywhere from 3–6 savings buckets going on at one time.

This strategy works really well for goals because it encourages you not to dip into your savings. For example, I saved INR25,000 in last year to spend the same for buying books this month because I put money in a savings bucket labeled “Books”. The name on the savings bucket ensured I didn’t dip into it for vacation or shopping for new shoes. When your savings bucket is for one specific thing, you’re more likely to keep contributing to it (and not withdrawing from it) until the bucket is full.

6. Know Your “Why”

You can save money in many ways, like buying cheaper gas or only going to see matinee movies, but at the core of each money decision is a reason for why we want to save money to begin with.

When you take the time to know your why, you can save money much faster and easier. You can make quick decisions about saving money because your why is at the forefront of your brain. And, your reason why you want to save may change over time. For now, you may want to save money so you can get out of debt or get current on your bills. In the future, you might want to save money because you want to retire early or buy a vacation home.

Your why is important because it helps you make everyday decisions like whether or not to buy a raffle ticket at the fair or whether or not to buy a cup of coffee. When you have a reason for saving that’s bigger and more profound than daily wants, you’ll be more adept at making the right financial choices for you.

7. Identify Spending Triggers

Each and every one of us has a spending trigger. An easy example of a spending trigger is going to buy a pint of ice cream after a bad day. Another example is scrolling facebook late at night and making a snap decision to buy things after seeing an influencer wearing them.

In order to save more money, take note of the times you spend on things outside of your normal budget. Ask yourself what you’re feeling as you buy the item. Are you stressed? Happy? Trying to make your day better? Once you know the feeling behind your spending, you can be more aware of it and redirect it when the feeling bubbles up.

8. Set Big (But Achievable) Savings Goals

Most of the time, we sell ourselves short. We are afraid to make big savings goals because we don’t want to fail. However, goal setting is a great way to save money. It keeps you accountable.

Achievable goal setting is more than just thinking, “It would be nice if I could save INR1,00,000 this year.” It’s about setting measurable and achievable goals and then breaking those goals down into smaller goals that you can tackle one by one. As you achieve smaller goals, you build momentum. You build faith in yourself. That’s how you accomplish bigger savings goals, so don’t be afraid to make some.

9. Make Your Payments on Time, Every Time

We all know we’re supposed to pay our bills on time. First of all, it’s the right thing to do, but secondly, it improves the relationship between you and your providers. In many cases it helps you improve your credit scores immensely. Paying on time every time increases your trust worthiness. Lenders want to know they can trust you to make payments on time. If you’ve proven that with your payment history, they’re more willing to offer you a lower interest rate because you’re a lower risk to them.