Earning money is just one side of the coin. Trouble comes, when we are not able to save our hard-earned money.

I was on the same boat a few years back, when I started earning more than INR 2,00,000 per month. I thought this was it. Earning money is equal to lavish life. But this actually made things worse.

I was not able to save even a dime each month. That time, I decided to work on my savings. Someone has rightly said;

"Experience is the Best Tutor"

Below are some of the tips that you can use to save a good amount for your future;
1. Open a Public Provident Fund
This account is one of the safest ways to invest your money. You can deposit a minimum of INR 500 per month and a maximum of INR 1,50,000 in a financial year. Then this amount is compounded.

Now, here comes the power of compound interest. If you regularly invested INR 12,500 per month for the coming 30 Years, you will be able to save approximately around INR 1.5 Crores.

2. Open a Recurring Account
Most of the banks have automated Recurring Accounts, which are great for automating your savings. Every month, have standing instructions to deduct INR 5000 from your salary account, and you will thank yourself after a year for the same.

One of the good things about recurring accounts is that you get interested compounded annually in this case as well.

3. Have an Emergency Fund Ready
An Emergency Fund is a must. Chances are you have already been told that you need an emergency fund somewhere in the ballpark of three to six months of your income. But it is better to have a goal in your mind.

Have an emergency fund of at least INR 50,000. Although this seems small for an emergency, you should think and grow it more afterward.

Your emergency fund should grow with your monthly earnings, and you should take an oath not to use your emergency funds at any point in time until it's a do-or-die situation.

4. Create a Budget
The best way to work on your budget is by tracking your spending. On the first day of a new month, get a receipt for everything you purchase, or just note everything in a spreadsheet.

Google Sheets have made it much easier for me. They have a ready-made Monthly Budget Tracking Template, which I use.

Funda is that you will have to know where are most of your expenses. Take a month, and do it. After the first month is over, and you receive your salary, sit with your spouse, and think of the cost cuttings that you can do.

In my case, money-sucking vampires were alcohol and petrol. 

5. Don't just save money, save for your future
When I save money, I have a purpose in my mind. To buy a house after 30 years or so. This makes it much easier for me to take a large sum out of my salary. I know it is difficult to take out 10% of your salary, but once you have a clear vision, why you are saving money, then it becomes much easier for you to do the same.

6. Start saving for your retirement as early as possible
Few people get rich through their wages alone. It is the miracle of compound interest or earning interest over many years, that builds wealth. Because time is on their side, the youngest workers are in the best position to save for retirement. 

Ensure that you don't mess up with your Provident Fund. Many people ask their employers to reduce PF deduction in order to get more in hand salary per month, which is again taxable, and they are also saving less for their retirement.

So, it is better to stick with what your employer is deducting from your salary, and have confidence that it is for your own good.

7. Use the 24 Hour Rule of Purchasing Something Expensive
Avoid purchasing expensive or unnecessary items on impulse with a self-imposed 24-hour rule. For any non-essential item, wait 24 hours before purchasing. It's perfect for online shopping where your items can simply be added to your card to purchase later.

8. Exercise
Having good health is really important if you want to save a good amount of money. People all over the world spend their hard-earned money just because they have indulged in bad habits like smoking and drinking.

If you and your friends are drinking 4 Beers per day, that costs around INR 600, which accounts for around INR 18,000 per Month, which accumulates to INR 2,16,000 per year.

This means, if your CTC is INR 5,00,000, you are only taking INR 3,00,000 per year home. This is a really big amount. So, it is better to leave alcohol besides, and have happy hours with your family and friends over tea or coffee at your home.

This is also important because drinking on a daily basis will cost you more on medical grounds.

9. Have a term insurance
This seems a tough decision because 50 lakhs term insurance will have a premium of INR 1,000 per month.

Several people around the world think that term insurance is of no use, and they just leave it behind. 

I had come to a person, who didn't have a father, and his mother was also not working. I asked him, how they managed their budget and who paid for their education?

The person replied that their father had term insurance of INR 50 Lakhs, which they received after his death. They were managing their education and budget using that money itself.

Bad times can't be predicted, and hence being ready for them will not only prepare you but your family as well. If you have term insurance, and God Forbid, something happened to you, money is only one thing that will keep your family running.

Sometimes, you have to think of your family more than yourself.

10. Use 50/30/20 Thumb Rule for Saving

• Devote 50% of your income to Necessities.
• 30% to Wants, and
• 20% to Savings.

If you find one of your allocations exceeds these percentages, make some adjustments to fit the formula.