Money Saving Tips: In today’s time, due to rising inflation, running the house on a low salary has become a big challenge for every middle-class family. But this does not mean that your financial condition can never improve. With a little thought and proper planning, you can manage your low salary very smartly. There is a simple but effective formula for this, which is called 40-30-20-10. By adopting this formula, you will not only be able to control your expenses but will also be able to save for the future.
What is the 40-30-20-10 formula?
The meaning of this formula is very simple. Whatever salary you get, spend 40% of it on your daily essential expenses, such as house rent, food items, children’s education and other basic needs. These are the expenses that you cannot avoid. Then spend 30% of your salary in paying off your debts or loans, so that you can be free from your financial responsibilities as soon as possible. Keep the third part, i.e. 20%, for your entertainment and social life. Spend on eating out, small shopping or travelling. Finally, keep 10% of your salary aside for savings, which can be used in any emergency that may come your way.
Making a budget is the most important
When you have to run the house on a low salary, making a budget is the first and most important step. At the beginning of the month, make a list of your total income and all expenses. Think carefully and see which expenses are necessary and which can be postponed for a short time. By making a budget, you will avoid unnecessary expenses and will also be able to increase your savings every month.
Understand the difference between need and want
Often we unknowingly spend a large part of our salary on things that are not necessary. Like buying a new mobile, buying branded clothes or eating out in an expensive hotel. All these are our ‘wants’, while rent, ration, children’s education and medicines are our ‘needs’. As long as your income is limited, keep ‘needs’ at the top.
If you want to avoid debt, act wisely
Taking a loan on a low salary can be the biggest mistake. Because later it can become a burden and worsen your financial condition. Especially use credit cards carefully and avoid getting stuck in excessive EMIs. Take a loan only when it is very necessary and there should be a clear plan for it.
Keep an eye on small expenses
Many of us do not pay attention to small expenses on a daily basis. Like drinking tea outside, ordering fast food or frequent online shopping. When all these expenses are added at the end of the month, a big budget is formed. Therefore, it is important to control these small things.
Find a way to earn side income
In today’s digital age, there are many options like freelancing, tutoring, blogging or YouTube, through which you can earn additional income apart from your salary. By giving a little time and effort, you can improve your budget through side income.
Make sure to develop the habit of saving
No matter how low your salary is, make it a habit to save something every month. Initially, start with 200 or 500 rupees and gradually increase it. Even small savings can prove to be a big help in the future.
Upgrade yourself, this is the way to success
The best way to get out of low salary is to update your skills. Today there are many courses and training programs available online, with the help of which you can increase your qualifications. This can give you better job or freelancing opportunities.
Experts believe
Many financial experts say that having a low salary is not permanent. With understanding, discipline and proper planning, anyone can improve their financial condition. All that is required is that you manage your expenses with planning and start saving for the future.