India is known for its savers, but as generations evolve and the consumption push weaves its way in, there has actually been a decline in this trend. What this means is that we are saving less today than we did 10 years ago.

Officially data shows that household savings as a proportion of GDP of the country has declined from 23.6% in 2011 to an estimated 18% in 2019 (financial year).

Why are we saving less? Partially because we are spending more. Why are we spending more? Partially to keep up with our neighbours and also because it’s easy to do, isn’t it? All you need to buy the next pair of denim or a saree or a set of dinner plates or even the next sofa is – scroll and click!

It’s tempting to spend but important to brake

Not so long ago, with time to spare, I found myself scrolling through a fashion apparel website and before I knew it, I had spent ₹8,500 (or thereabouts). Didn’t really feel the pinch, because it was on a credit card. However, the pinch became a punch by the time I got the credit card bill – which was twice the figure I expected. In reality, there was more than just once when I distractedly shopped online. More than just once, when I bought a bunch of things I didn’t really need. Of course, what added to the bill were also lunch and dinner outings with friends. It all adds up.

There came a time when spending less was hard. Thanks to my background understanding of personal finance and the importance of savings, I was able to identify the problem early and arrest it by simply using self-control.

If you too are finding it hard to save or to spend less, know that you’re not alone. There are many of us in the same boat. However, there is merit in taking a step back and re-evaluating your spending habits. It’s important because adequate savings is what helps us maintain a preferred lifestyle over a long period of time. It’s your savings working hard for the years when you retire and don’t have regular income to rely on. It’s also your savings which will come to the rescue if you have a family emergency or if you have unforeseen expenses at a later date.

Sample this: ₹10,000 saved today can become ₹30,000 in 10 years and nearly ₹1 lakh in 20. Imagine what you can do for your future just by saving ₹1-2 lakhs today.

Prudent spending and adequate saving is the tonic to maintaining a good life.

What you can do to build savings pace

If simple will power doesn’t work for your savings journey, try these suggestions below and see how you go!

• Step one – have a simple budget. Broadly divide your monthly spends into 5-6 buckets. Household essentials, groceries, school items, rent/loan repayment, entertainment and others. Also, add a new bucket termed saving – estimate 20%-30% of your monthly income and put it aside. Everyone’s buckets can be different, you have to keep track on where you are overspending and start cutting back.

• Step Two – plan the big spends – You earn so that your life is comfortable, don’t give up the spends that give you comfort. Instead if you know something is going to cost more than what you can fit into your monthly budget, then plan in advance. Let’s say you really want to do that tour of Europe, start planning, saving and investing towards this a year or two ahead of time.

• Step three – automate your savings – Don’t leave your monthly saving plan up to your whim. Who knows what spend tempts you enough to let go of your savings in a month? Instead, automate your savings by drawing them into an investment plan right at the start of the month. The money gets deducted automatically from your bank account and you don’t get a chance to spend it!

• Step Four – stop giving your phone number and subscribing – Every time you buy something at a store, they will ask for your phone number or you will key in your email ID for an online purchase. The outcome is several messages on discount offers and nudges to hit the buy button again. This doesn’t do you any good if you’re to rationalise your spending instead of overdoing it.

• Step Five – stay away from EMIs – You may have noticed that now you can pretty much buy everything on an instalment. If you can’t afford it right away – why not go for an instalment? An interest-free instalment is a great idea isn’t it, you don’t pay anything extra and you get the benefit of paying a little at a time, makes everything seem affordable. It’s when you can’t control the urge for the next instalment buy and the next, that’s when things get out of control. Interest-free or not – too many instalments may leave you with no money at the very start of the month itself.

There are many more ways to find your own solutions to your savings conundrum, but ultimately your goal should be simple: increase your savings and invest it efficiently to cater to your future lifestyle. Your current lifestyle is taken care of by your earnings, your future will be taken care of by your savings. Spending today on things which are just going to lie around the house or be thrown in a year is a waste of your time, effort and money.

The good news is that it’s never too late to change this trend, start now with the five simple steps shown above and reclaim your savings for your future!