How to Save Money in India?

Experts write billion words about investment. But it is surprising that how little is written about how to save money. Saving  comes naturally among Indians. But the global issue with savings is inconsistency.

How to save money consistently year after year?

Saving money is an art, and this is the reason why every one cannot master this art. But what can be done is to learn the basics of money management. This will greatly help even the non-savers.

Saving and investment of money is required for long term wealth creation. Long term wealth creation for family is the ultimate goal of saving and investment.

But wealth creation will be a goal which is too broad. Having a goal like this doesn’t motivate a person to save more.

Hence, finalizing a goal which is more specific, and with which a person can also relate-to is desirable.

To fix such a goal, one has to understand an alter point of wealth creation. What destroys wealth building possibility?

The biggest devil is debt and overspending.

Let saving money be that tool using which you can fight these two devils.

So next time when you take a pledge to save 10% of your income, tell yourself why you are saving money.

Save consistently…

If one is able to save money consistently then 50% job is done.

We all are born as great spenders. Our focus is more on spending instead of saving money.

This is the reason why even if we save well today, but ultimately we end up spending all those savings.

The temptation to spend is so high that, the savings eventually gets eroded.

We always seem to have some valid excuse for spending money.

Our mindset does not allow us to save more. We prefer to spend as we enjoy buying things.

Real example…

I bought a Macbook for myself by spending my savings meant for loan prepayment.

It would have been much wiser for me to use that money for its rightful purpose.

My calculation says that, if I would have made the loan prepayment (instead of buying the Mac) I would have saved more than Rs 250,000.

This is more than twice the price of my Macbook.

So, in real life, saving money becomes tough due to temptations.

If it is so tough then how to save money?

In India, people have different methods of saving money as compared to people from Europe and America.

In this blog post we will see the unique ways in which successful people save their money.

Start with baby steps…

Saving money is only the first step.

Preserving it from getting spent uselessly is the next important step.

The trick is to first save and then lock it.

How to lock savings? Now, this will be too quick for person learning to take baby steps 🙂

First digest this idea that saving alone is not sufficient. It is also important to lock it.

In this article we will see how to save money each month and also keep it intact.

Right Reasons to Save Money

If we do not first give ourselves strong reason to save money, the money will ultimately get spent unnecessarily.

Simply saving money will not help. One must also have good reasons to keep saving locked.

This is why, extremely self-disciplined and mature people save more money.

One must give themselves strong reasons to save money. Once we have a strong reason, we can then start to save money each month.

Save Money for Financial Independence…

Are you tired of your job? Do you hate your boss? Do dream leading a life which is more in your control?

If the answers are in YES’s, it means you want financial freedom.

Saving for financial independence is such a goal which is self-motivating.

There are people who save to buy car, buy vacation, etc…this is also not bad.

But it is also true that a true goal must also have a spiritual side of it. This spirituality encourages people to keep saving even in tough times.

The reason to save money should be simple, understandable, measurable and must also have a spirituality attached to it.

So my take about a RELIABLE GOAL to save money is consistently is to do it to attain financial independence.

But what is Financial Independence….?

Generate income, save money, buy assets, and this generate passive income. This is the process of wealth creation.

In simple words, wealth creation is a process of generating more and passive income.

The more one builds wealth, the closer one becomes to financial independence.

But wealth creation takes time. It is a slow but sure process of becoming self reliant and rich.

Wealth creation is like nurturing an Apple tree. It takes time to grow but when it grows it reaps fruits.

Why wealth creation is a slow process?

Suppose RAJESH has $2,000 in savings. If RAJESH invests it in bank deposit it will yield an annual passive income of $120 (say @ 6.0% p.a).

But $120 per annum is too less. It is nothing….

This is why people rely on their paycheck from job to manage day-to-day needs.

Potential income that can be generated from savings is too less. Why? Because we keep so less in our savings.

Suppose RAJESH needs $45,000/year to manage his day to day expenses.

In other words, RAJESH must increase his passive income from $120/year to $45,000/year to become.

But how to do it?

This will be possible if RAJESH can increase his savings in bank deposit from $2,000 to something bigger.

At the rate of 6% per annum interest, the required deposit should be $750,000.

A bank deposit of $750,000 will then generate a passive income of $45,000/year.

For sure, accumulating $750,000 is going to be neither easy nor fast. Wealth creation takes time.

If objective is to get rich and attain financial independence, one must be patient.

how to save money in india each month

Become a big saver of money…

Why it is so difficult to change our status from an owner of $2,000 to an owner of $750,000?

Accumulating $2,000 is lot easier. It is easy not because the value is small, but because we cannot do much with an amount less than $2,000.

But by the time we accumulate $2,000 or more as savings, we start getting new ideas of spending it.

We start getting ideas of why the new iphone-10 is the best phone ever. How that new LED TV will change our lives….

The point I am trying to make is this, starting to save is easy, but hurdle comes later. The main challenge is to keep those savings intact.

This is the reason why experts give so much emphasis on investment.

By investing money we can locks our savings.

Investment keeps our money away from us. This way, it does not get spent on trivial things.

Investment also yields returns (like interest of 6% p.a. from Bank Deposits).

These returns on investments can earn us potential monthly income that we need to attain financial independence.

So now we know that, a combination of saving and investment is essential.

Knowing easy ways of how to save money from salary will help in the wealth creation process.

Ideas on how to save money in India each month

pay yourself first

1. Pay Yourself First

First step is to open two bank accounts. One will be a salary account where the paycheck gets deposited. The other will be savings a/c.

In savings account, money only comes in, and if it goes out, it goes only for investment.

Second Step is to budget all expenses. Try remembering all expense that you made in last one year.

It should cover all expenses starting from utility bills, cooking gas, groceries, vegetables, vehicle fuel, house rent, EMI etc.

Expense that we often fail to budget are vehicle insurance premiums, emergency funds, unplanned purchases, property tax, miscellaneous expenses, vehicle maintenance, gym, dining out, prepaid mobile recharge, etc.

The point I am trying to emphasize is, our list of expenses shall be very exhaustive.

Once we have identified all expenses, start putting values against each.

Third Step will be to identify how much we can pay to ourselves.

Suppose monthly income is $100. Total expenses comes out as $85. It means $15 is the money we can save from salary.

This $15 should be that money that no matter what we do, will never be needed to manage our day-to-day needs.

Pay yourself first this amount ($15). How?

Fourth Step will be how to pay oneself.

Remember, you have two bank accounts, ‘salary’ and ‘savings’. Online transfer this $15 from your salary account to your savings account.

This transfer of money should be done on the first day your paycheck gets credited into your salary account.

Before you pay any bills, pay yourself first. Do not allow yourself to even get a feel of those $15.

Make it as if this money ever existed in your salary account.

Making yourself feel poorer is better. If we have less in your hand, we will spend less.

But remember that feeling poorer is not the real goal. Feel poorer for long term wealth creation is the objective.

If we have excess money visible, our mind start playing pranks with us. It will generate ideas of spending on needless things.

This is the reason why the world richest man Warren Buffett leads a humble life. His focus is wealth creation and not on lavish spending.

piggy bank Save Money

2. Open a Piggy Bank at Home

Now we know that when our mind sees free cash (unlocked money) it start playing game with us.

Free cash in your wallet? Your mind will gives innovative ideas of spending it on trivial things.

The ideas can be like going on cruise for vacation, buying a nice car etc.

It is only natural. Spending on entertainment and luxury cannot be avoided. It is only human nature to ask for it.

But there must be control. Family must understand the going on unplanned vacation and buying car impulsively is too expensive.

So it is better to plan for it. How to plan?

Planning means, giving oneself a distant date (for vacation or car) and start saving for it from today.

The whole family should get an idea that they can save anything from small coins to big notes to fund the cause.

The objective should be to save heavily so that the piggy bank gets full in quick time.

This type of exercise does two things for us. First, the family realizes that if they want to buy a big thing it takes time to realize a dream.

Secondly, the family will learn that it takes effort and patience to buy things. Kids will learn how to fight the temptation of immediate gratification.

Make it a habit of your family. In case one wants to buy any big thing, first discuss. Then start a piggy bank and start saving for the cause.

Everywhere Daddy’s credit card will not fund the requirements.

This will cultivates the habit of savings which the family can cherish all the life.

Piggy bank is only symbolic, what it actually does is to cultivate one of the best habits necessary in all human beings – wise spending and more saving.

how to save money from salary

3. Your Pay rise should also reflect on “Pay You Self First” rule

At the end of the year when we get a pay rise it is always very satisfying. But what we do with this pay rise?

Generally we end up spending all of our our pay rise by inflating only our expenses column.

For sure, when we get a pay rise we can expect a proportional rise in standard of living.

But a proportional rise should also reflect in ‘pay yourself column.

Till last month your salary was $100 and your were paying your self $15. If your salary grew to $120 then you pay-yourself should also rise proportionately to $18.

The advantage of increasing the Pay Yourself Column is that, it adds to your savings.

The more you are contributing to your Pay yourself column, the more free cash is available for investing.

It creates a cyclic process. High Income > High Savings > More Investment.

How to save money India

4. Take bank loan, but self contribution should be more than 50%

This piggy bank is slightly different from your home piggy bank. Leave that piggy bank for your children.

This new piggy bank should be used for bigger expenses like new home purchase, new car, higher education for child etc.

Suppose you decide that you want to buy a car, it is very easy to buy it using car loan. If you decide to buy car today, tomorrow you will get a car loan and within days the car will be at your door steps.

But what is suggest is to learn to delay this gratification.

As a rule of thumb instead of paying just 20% as down payment for the car, try paying 50% as down payment.

Suppose your want to buy a car whose price is $13,350. Ideally a bank will pay you loan for 80% of the cars value $10,700. But do not fall prey to this temptation.

Instead, wait till you have 50% funds ready for down payment.

Create a piggy bank for buying this car. This piggy bank can be like a mutual fund SIP or a money market fund.

Rule is, you are not allowed to but the car till you have 50% funds ready for down payment in your piggy bank.

You can also do similar exercise while buying a house. Set aside each month a sum of money that on a later date you can use for buying your house or your car.

Home Loan EMI

5. Pay a Hypothetical EMI for your New Home

Even though you are not planning to buy a home today, imagine that what if you have a home for which you are required to pay EMI.

But how much EMI you shall pay for this imaginary home? A person can pay EMI equivalent to 30% of their take home salary.

Suppose your net income per month is Rs 10,000, in this case you can pay Rs 3,000 as your imaginary EMI.

Continue paying 30% as EMI to yourself.

This EMI you will continue to pay till to really buy a home. By the time you really start paying the EMI, your are already used to paying that amount.

But more than that, paying this hypothetical EMI is building a corpus for the down payment for home.

Supposing that you are a 24 years old graduate, just out of college. Your are in your first job.

If you start this virtual home buying EMI payment scheme now, by the time you are 30 you will have a nice savings.

You will also exactly know how much EMI you can actually afford. Paying hypothetical given this tremendous realization about our affordability.

I have personally used this trick of money saving and it works the best.

gold save money

6. Accumulate Precious Metals Like Gold or Silver

I will suggest to add one column in your expense budget. Name it ‘investing expense on gold/silver’. Keep a target of buying at least 5 gm of gold (or equivalent of silver) every year.

Presently 1gm gold will cost approximately $41. This is nothing compared to what we end up spending on weekends.

Every month save $20, it will be sufficient to buy a 5 gm gold coin at the end of the year.

The idea of highlighting gold purchase here is because of its ability to lock funds.

Once we buy gold it is not easy to spent it (like cash). Moreover gold also shows reasonable price appreciation in long term.

Suppose you buy 5gm of gold each year for next 20 years. At the end of 20th year you will have 100gm of gold.

If gold price appreciates even at a decent rate of 6% per annum, after 20th year its rate will be close to $132/gm. It means, 100 gm of gold will be worth close to $13,000 (Rs 8,50,000).

I personally consider gold/silver as an excellent way to save money from salary. It is a great tool of locking money from getting spent on trivial things.

How to save money India - pay loan

7. Prepay Your Loans

These days almost all of us carry some form of loan or the other. Majority of us carry personal loan or home loan.

Prepayment of loans helps in saving heavily on interest.

I have written one article purely on home loan prepayment. If any one wants to know more about loan prepayment they can read this article.

This is one practice that I have personally followed and had experienced its benefits. Prepayment has not only allowed me to save on interest but it also allowed me to close my loan in half the tenure.

There was a stage in my life when I was diverting all of my ‘pay yourself funds’ towards my loan prepayment.

Home loan prepayment is a very realistic way of saving money. Every time I make a prepayment I know that I have saved huge interests.

I will suggest my readers to at least once read this article on loan prepayment and decide for yourself whether this is worth trying or not.

yes bank savings account

8. Open Savings A/c in Bank offering highest interest rate

Why to only think complicated when it comes to savings money. You will agree that the easiest way to save money from salary is by opening a savings account.

We do not consider savings account as best option because it offers low interest on savings account.

But let me ask you this question, do we have an option? If we are not opening a savings account can we manage with something else? No we do not. One has no alternative to savings accounts.

What saving account to do for us? It helps us to receive salary, pay bills, get debit card/credit cards, avail home loan etc.

So why to needlessly ponder about low yields from savings account. Better option is to choose the best from the worst.

Yes, these days not all banks offer same interest on savings accounts. A good idea will be to have our savings account in a bank that is offering highest interest rates.

Interest Rates on Savings Account

Deposit Type Name of Bank Offered Interest Rate on deposit below Rs.1L
Saving RBL Bank 5.1%
Saving Yes Bank 5.0%
Saving Kotak Bank 5.0%
Saving Bandhan Bank 4.25%
Saving IndusInd Bank 4.0%

tax planning save money

9. Planning Taxes  saves money

Our target is to save every bit possible from our salary. By planning our taxes we save a good deal of money from salary. Let me give you an example to explain how much we can save by planning our taxes.

Small savings like these can make hell of a difference in long term. In India, rules allow us to save money from salary as listed below:

U/s 80C – Over all exemption is Rs 100,000/year
(Investment in ELSS, PPF, NSC, LIC, Home Loan Principal etc)

U/s 80D – Over all exemption is Rs 15,000 (Rs 20,000 for Senior Citizen)
(Health insurance for Self, family, dependent parents)

U/s 80E – 100% interest on education Loan is exempted from Income Tax
(Education loan taken for higher studies of self, spouse, children)

Examples Income per Year Tax Saving Tax Payable Savings/ year compared to Ex. 1
80C 80D 80E
1 500,000 0 0 0 28,840 0
2 500,000 10,000 0 0 27,810 1,030
3 500,000 30,000 0 0 25,750 3,090
4 500,000 50,000 0 0 23,690 5,150
4 500,000 75,000 0 0 21,115 7,725
5 500,000 100,000 0 0 18,540 10,300
6 500,000 100,000 15,000 0 16,995 11,845
7 500,000 100,000 15,000 25,000 14,420 14,420

saving money

10. Develop Small-Saving-Habits

When it comes to long term savings, even small savings make a big difference. Small saving over a period of time can prove to be very beneficial. Big benefits are not visible while practicing small saving habits. Small saving habits is more like a discipline.

When we practice small small, we also inculcate these good habits in children. Small saving habits works on the principle of ‘delaying gratification”. Lets see some small savings habits that we can implement in our day to day life:

  • Driving a diesel car will save you Rs20/liter compared to Petrol. Driving a CNG car will save Rs 35/liter compared to petrol.
  • Buying groceries in bulk from places like D-Mart can reduce your monthly bill by about 3-5%.
  • Instead of buying new books to read, try a smart phone app that provides free audio-books. This can save at least Rs500 per month.
  • When you leave your house switch-off electrical appliances. Never leave chargers/TV/Phone/Music/Laptops/Microwaves on standby mode. This itself will reduce your electricity bill by nearly 3%
  • Buy clothes in bulk on those February month SALE. Idea shall be to buy all news clothes for that year in February (as far as possible). Use these new clothes as and when the occasion comes. This can save you nearly 30-50% of cost you spend annually on clothing’s.
  • Try jogging early morning in open air. This can reduce your gym bill by Rs20,000 anually.
  • Before you swap your credit card, ask yourself if you had to pay by cash, would you have paid for this purchase? Generally because we are using credit cards, we buy things we cant afford. This small habit of self checking ca reduce your unnecessary purchases by 5-10%.
  • Plan your annual vacations in advance. Book air tickets 3-4 months in advance. Do hotel bookings 3-4 months in advance.

personal cash flow save money

11. Prepare a Personal Cash Flow Report

Here the idea is to buy things we can afford. Generally we get tempted to buy things we cannot afford. This creates overspending.

Why we overspend? We overspend in ignorance.

If we are not aware of our affordability, we will fall prey to overspending.

How to prevent oneself from overspending? We will see a solution to these problems emanating from real life experiences.

Check and correcting bad habit of overspending has resulted in development of this wonderful solution.

Generally when it comes  saving money, nothing seems to work.

But the concept of cash flow report preparation really works.

Example: One day my family decided to replace our old dilapidated refrigerator with a new one. The cost of that refrigerator was Rs 49,000.

Before we commit to buy that refrigerator, I ask to my self “Can we afford it“?

To answer such questions I dig deep into my cash flow report.

In ‘miscellaneous shopping’ row I checked how much saving we have accumulated.

I found that we can easily buy one. In the same time, I was suppose to pay school fee of my child. The fees was close to Rs 35,000.

When I checked my cash flow report I found that I was running out of funds. As this was uncompromisable expense.

Hence I decided to borrow some money from ‘miscellaneous shopping’ fund.

As a consequence we were not able to buy refrigerator that month.

But we knew that in next couple of months we can buy it.

So such cash flow reports not only helps us to check affordability but it also helps to manage emergencies.
how to save money in india each month

celebrate save money

12. Always Save Money for Birthday’s & Anniversaries

It is my personal experience that not saving for birthday’s and anniversaries can lead to more burden & pain. Birthday’s and Anniversaries are such events that happen on a fixed date each year.

Depending on ones requirement, it is advisable to save 12 months prior to the real expense date. We are 3 people in my family. It is inevitable to buy gifts & arrange a small party during 3 birthdays and 1 marriage anniversary. If the expense is inevitable why not save for it from start of the year? If we are not saving it means we are spending it somewhere else. It means, when the priority comes (like Birthday’s) we dig into our emergency funds or investment to meet the needs. This causes a very serious dent to our goal of financial independence. The best way to save for Birthday’s & Anniversary is to start a recurring deposit (RD). This will also earn decent returns and will also lock your savings for each 1 year. I have started following recurring deposits for my family.
how to save money in india each month

how to save money from salary

13. Skip Grocery Purchase once in every two months

This may sound too foolish suggestion to save money but it really works. Almost all household maintains a huge inventory. Funny thing is that we are not even aware that we maintain it. Sometimes it happens that this inventory gets stale and then we realize it.

In my house I have noted items like kabuli chana (white gram), rajama (kidney beans), maida (wheat flour), tooth paste etc frequently appearing in forgotten-list. This list is endless. We can only come to know about it when we start searching for it. Best way to start searching is by not doing grocery shopping one weekend. Then, looking into your inventory for any thing that can be cooked and eaten. This will not only clear your food-store, but will also save good money. It is really an interesting habit. I will suggest everybody to try it once in 2 months.

How to Increase Dividend Earnings of Your Investment Portfolio

14. Increase Home Loan EMI by 5% each year

This is a very safe bet. It diverts your money from expense to loan pre-payment. Banks would like you to pay home loan till the last month. But it is in our interest to prepay the home loan early.

Not only it will make us debt free, but it will also save huge money. Many people does prepayment of home loan. They accumulate money (savings) & then make prepayment. I will propose an easier alternative. As soon as you get your annual pay-hike, make visit to your home loan bank. Tell them that you would like to increase your home loan EMI. I will suggest you to increase your home loan EMI by 5-12% each year. I have observed one of my friend using this trick very effectively. They managed to pay back their home loan in less than half the total tenure. So go on and increase your home loan EMI. Make it a good habit. Increase the EMI judiciously each year.

post office monthly income Plan (MIP)

15. Save Money to Generate Future Monthly Income

I have found this trick to save money very useful. All monthly income plans (MIP) are debt linked investment so its absolutely save. No need to worry about possibility of loss. Starting a MIP will solve two purpose.

First, it initiates a strong desire to save money. If idea is to generate future-fixed-income, its very inviting. Higher will be the fixed income (like from MIP) less dependent we will be on our salary. It ultimately translates income financial independence. The only drawback with MIP’s are low returns. But believe me, do not discourage yourself to start a MIP because of lower returns. Look at MIP as Savings option that is given long term returns close to 5-6% per annum. A savings plan giving these returns is very good. Some might ask that if we are locking our money for long term (in MIP max is 11 years), why not invest in equity? Some might even say that if return is close to 5-6% why not buy a Fixed Deposit? Both questions are valid. But in MIP we are able to generate fixed income after some years. Equity can never promise fixed income. Fixed deposits can give higher returns its too liquid. People are often found redeeming their FD’s prematurely. Considering that purpose is to generate fixed income, MIP’s are very good ‘savings’ option.

how to save money in India - lock it

16.Lock Your Savings Forever

One day I asked one of my friend, how much is your saving? He replied 30% of his take home salary. I said that’s very good, but how much do you save out of it? He became puzzled, so rephrased my sentence. I asked, out of 30% how much you never spend? What happens is, though we save money today, but we eventually end-up spending them.

This does not help our cause. Real saving is that saving that never get spent. Generally, what we keep in savings is very liquid form. Liquid money gets spend very easily. Savings account, recurring deposit, fixed deposits are good saving options but it does not lock our money. When we do not lock money it gets spent. So the efficient saving is that money that can never get spent & keep appreciating in value. Suppose one has home loan, use the savings to make prepayment of loan. Once prepayment is made, that money can never be spent elsewhere. Moreover, prepayment also saves huge sums of interest component. Similarly if one is carrying any type of loan (auto, personal, education, credit card etc), saving must first be used to prepay loans. This is one very effective way of locking savings from getting uselessly spent elsewhere. One can also use savings to buy as much as tax-savings options. It is a rule that says, be 100% tax efficient and 100% debt free before investing money. We spend so much time thinking about stocks and mutual funds. But instead, we make more money by simply saving tax & clearing-out outstanding loan by prepayments.

How To Save Money - Budget Higher

17.Budget higher than necessary

People who spend money according to budget can use this tool to save more money. The trick is simple which will helps to save money unknowingly. It is common belief that if one has to save, it must be done unknowingly.

Too much awareness about saved money will ultimately lead to spending. If saved money is ultimately getting spent then that saving is useless. Try this trick and you will be surprised how easy it becomes to save money month after month. The trick is, we adapt to higher expense within couple of months. So after a couple of months one does not realize that they are budgeting more than necessary. Hence this savings gets accumulated month after month. It is important to proper channelize the savings. One can either put them in fixed deposit, invest the money, lock it in emergency account etc.

SL Fixed /Predictable Monthly Bills Actual Bill Amount Budgeted Savings (10% Extra) Savings
(i) (iii) (ii) – (i)
1 Phone Bills $16 $17.6 $1.6
2 Electricity Bill $30 $33.0 $3.0
3 Monthly Loan EMI $500 $550 $50
4 Internet Broadband Bill $25 $27.5 $2.5
5 School Fees $70 $77.0 $7
6 Auto Fuel $55 $60.5 $5.5
7 Medical Insurance $30 $33 $3
8 Annual Auto Maintenance $20 $22 $2
$746 $821 $75

save money Trick Mind

18.Trick Yourself & Save Money

We are all natural spenders of money. We can spend money more easily than we earn them. Hence it requires special tricks to continue saving money for long time. We can actually trick our mind and influence it to save more money.

a) Buy a Day of Financial Independence: Suppose ones annual expense is $24,000. Divide this by 365 and the value you get is $66. This value can be used to motivate our mind to save. The value is more achievable and encouraging. Every $66 saved means the person is actually buying a day of financial independence for his/her family.

b) Reduce frequency of spending: When we say that we must give something all together to save money, that statement itself makes it difficult to practice. Instead of giving up something all together its more practical to reduce its frequency. A habitual dinner cannot give up drinking in a day. But if frequency of drinking can be reduced to once month, that itself can be considered as a success.

c) Idling triggers spending’s: Have you ever noticed yourself planning to buy a Smart TV while you are knee deep in work in office? No, when we are busy doing something our mind cannot go on a spending spree. Its the idle mind that’s the culprit. Keep yourself busy. Developing a hobby is a good way to keep oneself engaged all the time.

d) Make all your big Purchases in Cash: Credit cards has made spending’s too easy for us. We buy now and pay later. This facility has made us a compulsive spenders. We do not feel the money leaving our pocket. On the contrary, studies say that people who pay by cash are more likely to live more frugal life.

e) Spend only on things you use most: We spend most of time home in our living room. In metropolitan cities, people spend more time driving on road. In smaller cities people spend more time watching TV. Its a good idea to identify which activities take most of your time. Spend money to make only these areas better. This realization will help you understand that where you can avoid your spending’s.


Saving money each month is difficult. But setting up rules as discussed above will not only manage your short term and long term expenses but will also make you financially independent.Have a happy spending.Do not forget your goals of Savings…We are saving to ‘Get Rich, and the only way we can get rich is ‘BY ACCUMULATING ASSETS’.

Disclaimer: All blog posts of are for information only. No blog posts should be considered as an investment advice or as a recommendation. The user must self-analyze all securities before investing in one.

Suggested Posts…

58 Comments on "How to Save Money in India?"

  1. Great tips, I am definitely going to follow these to save my next months salary.

  2. The golden guide to saving money is to start investing! This post greatly describes how one can save money for a better future. I wanted to add, starting a SIP is also one of the best ways to save money. It lets you save small amounts monthly to generate wealth in future.

  3. One of the best way what I have faced is using coupon code while online shopping. It helps in saving money from your salary. Coupons are available for groceries, clothing, traveling, booking and ordereing. So, basically use promo codes every time you spend.

  4. Thanks.It’s a very well written article and easy to understand.The methods you suggested I am going to use them.
    A must read for young generation.

  5. Dhanraj Kumavat | January 3, 2017 at 6:20 pm | Reply

    Excellent Article for saving money

  6. A great article i love are really doing very good job please keep it up.god bless you.excellent points you have made here.i loved it your post. Thank You So Much.

  7. thanks it’s great

  8. Hi , Wanted to thank you for taking your time and giving us the best piece of knowledge and appreciated , because it come at the right time .Please would kindly appreciate if you you could chat with me on my personal email and then i can request your idea on my savings , as i want to save for me and my new born baby

  9. Hello Sir, I’m just one month away from joining my job. So before i could receive my salary i wanted to know on how to save my money. I went through your article and its very insightful and an eye opener for people like me.
    Sir,my take home salary would be 48,000/- per month and I might get 2 lakhs which is my variable each year ( 1 lakh for every 6 months). I will stay in Hyderabad and my expenses per month would be 10,000. I have an education loan of 7 lakhs from SBI.
    So out of the 38,000 that is left in each month would you suggest me to repay all this amount towards my loan or repay only 30,000 and put the remaining 8,000 in my savings account?

    • Keeping at least 10K in savings account (or recurring deposit) towards managing emergency expense will be a wiser alternative


  11. Sir i m going to earn around 13000 per month in 1year and 16000 in 2nd year per month and 19000 per month 3 year and 23000 per month 4 year .each year may be i spend around 84000 for my expenses .i have to save for my marriage with left amount in this four please suggest me the ways to save this money where i can make more out of it.

  12. It’s wonderful that you are getting thoughts from this article as well as from
    our dialogue made at this time.

  13. Nice Article. If you have liquid cash, it plays with you till it is spent out. Now a days I am buying everything online. It is really addictive. Especially if you see some deals, sale offers or cashback from website like ….. you just buy even you don’t need it now, because you are getting it for cheap. The point we forget is we are spending.

  14. Thanks for the interesting article. I am using most of these but few were new to me. You have described everything in a very interesting way. Great Job!!!

  15. An eye opener article. Thanks for giving so much information and tricks to save money. Really hats off to you. Thanks.

  16. Hello Sir,
    I earn 25,700 pm and my expenses for family of 2 (me & my wife) are as below,
    1. 2 Credir cards minimum balance pay each month (outstanding amt 39k, 40k) = 1500+4500 = 6000 pm
    2. house rent = 6666 pm
    3. water + ele bill = 700 pm
    4. Petrol for bike = 1800 pm
    5. grocery, milk, veggies etc = 2500 pm
    6. mobile bill = 1000 pm
    7. news ppr = 100 pm
    8. laptop emi (now 3 remaining) = 3000
    9. AC emi (5 remaining) = 3000
    10. medicines = 500 pm

    total = 25266 out of 25700

    My question is, is it reasonable to take a personal loan at 16.53% interest to clear off credit card debts?
    For example if I take loan of Rs. 2Lacs for 4 years EMI would be Rs. 5602/-
    from which I was going to clear off credit card debts + other 2 EMIs, also remaining amount from loan, I was going to use it for my wife’s delivery in Dec-Jan

    Please suggest whether i am going in correct way or not?


  18. Great article, Thank you for sharing these ideas, Here is one tip from my experience, I am an online shopping addict and these days i save a lot of money by using cashback sites, even free stuff, is one of my favourite cashback site it always gives good offers.

  19. nice article.i really appreciate it.

  20. hai sir,
    Thanks for your blog, This blog is my eye opener for my initiation of savings habit.

    I want to invest of Rs.10,000 per month in mutual fund through ECS for long term (15 years). Please suggest 10 top most performing mutual funds for long term.

    It will be very useful for me for my child higher studies and his marriage.

    Thank u,

  21. One of the best ways to save money is by sharing daily travel cost with colleagues. Since we travel daily to office, the amount saved by carpooling with colleagues over an year will be huge. There are free carpool matching services for working professionals like where one can find carpool partners.

  22. I am regretting why I found this article after 8 months of my first salary, but I am happy to start saving from this moment.

    I get 9875/- per month, in such a little amount it gets really difficult to save, but my bills are paid by my parents. Moreover, friends with high salary also tempts me to spend on vacations, and if I deny it makes me feel inferior, how to deal with the situation.

  23. Thanks a lot for your suggestiosn sir. I was looking for guidance on the same and this is helpful. However I want to further discuss with you. Please provide me with ur email ID I shall email you my CTC details.

  24. my income is around 40000 per month and expenses are around 20000 per month
    i dont want to save money at one place .can u suggest me best ways to save so that it will grow faster

  25. hi very nice article
    presently i have 15000 rupees can u suggest me how to save them .which method isd better

  26. Thank you sir,it’s very nice article. It is very useful to all those who have no specific direction to save money.

  27. hi also i wanted to know that if a person earns Rs. 15000 per month what should be the ideal amount to save per month.

  28. who so ever has written this article….hats off to you.
    not only have you cleared the whole block and burden of savings but also given me nice ideas and new insights into making savings more easy via this article..
    Thanks a ton

  29. Nice article , thank you very much, i really understood the importance of savings.
    Hopefully ill start saving now onwards.
    Thank you once again.

  30. Hi there mates, good article and nice arguments commented here,
    I am truly enjoying by these.

  31. I think more you spend more you earn.

  32. Hello sir
    I was searching for how to save money from salary ,i came through this article
    it is a very nice article ,i have some query regarding saving..
    I am earning 21k per month and my expenses are 6 to 7k per month ,
    then how to save rest of money in term of get some profit from that remaining money and i have 50 k saving in my account,what to do with that money ,
    Kindly suggest me.

  33. Hi their,

    I am earning 27500 pm. and i just started Flexi RD for 5000 (can save multiple of 5000) am deposting 10000 each month right now. also has 40000 in my Savings account. Am planning to buy a flat in couple of months and as confirmed the installment will be somewhere around 13000 each month. my monthly expaness are like 10000 (including my room rent and food n all other stuff). But once i ll start paying installments. it gonna b tough for me to manage all my expnesess. Please suggest what would be a better way to manage it.


  34. karthik akoju, karimnagar | December 11, 2012 at 12:10 pm | Reply

    hai.. sir.. thankQ for giveing good tips in how to save money.. and i like that u r explained “trivil things”

    sir im getting salary Rs.13,500 per month..and im saving chitts in 7,500 rupees for month. please tell me how to invest in shere market,

  35. Hello sir..I earn 9k Per month and this is my first job and am married…4 Months back i started saving 2k on RECURRING DEPOSIT in Post office..And i need some more tips on saving..Kindly help me..small investments am looking out for and am staying in bangalore..So that i can help my hubby in saving..Kindly suggest me..Thank you..

    • Investment Blogger | October 20, 2012 at 5:01 am | Reply

      Hi Anu, its nice that this article helped you to gain some insights into savings.

      Your option to go with RD’s is a good option.
      You can also consider investing in debt linked mutual funds through systematic investment plan (SIP). The interest will be slightly better than RD’a.

      In case you want to earn higher interest you can go for balanced funds through SIP route. But remember that you must hold your deposits for more than 3 years.

  36. Hi..Thanks for the post..Learnt some tips on how to save evry month..And as u said its very tough to save money evry month..This Article is an Eye Opener..Thanks a lot..:)

  37. Worth of reading this article.

    Just before 3 months only started to save 2k per months which is 10% of my salary after a wrok experice of 30 months. I should have started this savings earlier.

    After reading this article will start saving more:)

  38. Dear All, This saving money formula is only literature which makes good reading. Actual money saving is not this.

    Secondly, saving is not the method of building a good financial background. You have better methods. mail me on

    I am not a tax advisor/Life insurance agent /business man. I can still help u.

  39. Dear sir,
    First of all I really thankful to you for the blog. additionally I have my query:
    My salary is 60000 but I am not able to save as expected or as good as neglegible.
    I am going to tell you my liabilities, please guide me for better saving.
    1. Education loan: 15000 pm
    2. home loan: 8000 pm
    3. education of brother: 5000pm
    4. home expenses: 10000 (including rent)
    5. other and agricultural expenses: 10000
    Normaly I left with 10000-15000 pm but it happens that nothing remains at the end of month due purchase of new home gadgets.
    kindly suggets me strongly.

    • Investment Blogger | June 27, 2012 at 1:41 am | Reply

      Hi Santosh, thanks for writing and appreciating the blog.

      From the pattern of your expenses, it looks like for the first 23,000 which is bank loan, that takes away nearly 40% of your earnings. You cannot save much here. See if you can transfer these loans to other banks which charges slightly lower rate of interest.

      In your home expense, try paying this money using your credit cards. That way you will start accumulating points on your cards which you can redeem later for some gifts or free vouchers. If you are using credit cards it means you are not drawing money from your savings account, it means you will earn interest on your savings.

      About ‘other’ expenses, see if your apply the same credit card rule. Look deeply in this expense and I am sure at least you will find avenues to save 2-3% here.

      Now from the balance 10K-12K, you can do some really saving. I said in My article, pay your self first, start a recurring deposit savings scheme with your bank. As soon as your income is credited in your bank, automatically a pre-decided amount will go to your savings scheme. This will happen automatically and your will not have any option of spending this money.

      At the end, use my favorite rule, keep a piggy bank in the center of your house and tell all members to start adding something to it every day/week.

      Try this, you will enjoy.

  40. I’m typically to blogging and i really respect your content. The article has really peaks my interest. I am going to bookmark your site and preserve checking for brand new information.

  41. Hey thanks buddy.. I’m not sure if you are from India.. But if you are, do you think this is the right time to Invest in Mutual Funds/Stocks considering the current market scenario…I am the one who wote the above comment (Anonymous):)
    Appreciate your help..

  42. Excellent article for Newbies like me 🙂 Just got my first salary and this is the perfect article to start saving 🙂 thanks

    • Investment Blogger | June 1, 2012 at 1:56 pm | Reply

      Congrats for your first salary.
      I must complement you that in this young age you are already into investing learning. Keep it up.
      Thanks for your positive appreciation.

  43. Md JishanAli | May 13, 2012 at 2:17 am | Reply

    I am really thankful of your beautiful tips to save money.

    • Investment Blogger | May 13, 2012 at 5:34 am | Reply

      Thanks for your feedback.

      • karthik akoju, karimnagar | December 11, 2012 at 12:23 pm | Reply

        sir.. this article is very good. but i give u small suggetion.. to write more articles on saving money..
        recently i read “rich dad.. poor dad” book it is helps u more..
        if u want that book pdf.. search in google.. and get that..
        Thank u sir…

  44. Investment Blogger | May 5, 2012 at 2:06 am | Reply

    @ Karthik & Krishna
    Thanks for your complements

    I think you should try Recurring Deposit (RD) Savings Plan offered by all banks. This is like a ‘automatic savings’ that keeps happening every month without you even noticing it. This will prevent your money from getting spent.

  45. PraveenKumar | May 4, 2012 at 6:02 pm | Reply

    That’s a good idea; now-a-days i’m trying Piggy bank but i’, using those little money for next month expense.

  46. Good ideas
    Great work

  47. Hai.. first of all i tell u thank’s..
    bcz of i learn some saving tips from u..

    Good tips for saving.. and joyfull life..

    thank u once again…

Please post your comments here. It fuel us to write better...