1. First things first. Create a budget.

You can make better decisions if you know where your money is going. This would help you save money quite easily. At the beginning of every month, draw up a budget taking all your expenses into account. Take charge of your finances by determining your expenses and deciding where your income should go. After listing out all your regular expenses, you can set aside some money for entertainment and eating out. And always stash away some money for emergencies. Overall, keep your living expenses low.

2. Reduce your debts.

Analyze any debts you may have. Pay off those with the highest interest rate first - usually your credit card expenditure. Pay a lump sum on your credit card or close the outstanding amount, and reduce any other loan repayments.

Always give higher preference to closing the higher interest rate loans first. If you have a good credit standing with your bank, try to bargain with your bank to reduce your interest rates or to adjust EMIs so that they don't pinch you. If your bank refuses to do either, look out for alternatives. Several banks offer transfer of outstanding amount on credit cards or loan transfers.

Bear in mind that loans like Home loan actually have Income Tax benefits associated. So, do some savings-vs-expense analysis before closing that loan.

Always put money away for a rainy day and make sure you have a cushion of cash savings. Do not dig into this entire amount to pay off your existing loans - it is in your safety to have some money stashed away.

3. Cut your spending.

Make this a priority. Think whether you really need that new flat-screen TV now. Maybe going on your dream overseas holiday can wait one more year? Making sacrifices this year and living on a tighter budget will leave you much better off in the long run.

Cut down on frequent visits to the local Multiplex. Instead, rent a movie from your nearby rental store and watch it at home, rather than spending hundreds on a multiplex!

4. Slash your Mobile and Internet bills.

Save on mobile phone usage. Often, your mobile connection plan might come with low-cost add-on services like - National Roaming, STD and/or ISD connection, GPRS etc. Analyze the services you really need and cancel off unnecessary ones - there is no point in paying monthly rentals for services you don't really use.

Also think about downgrading your mobile connection plan. Do you really need the Rs.499 rental post-paid connection? Maybe you can switch to Rs.299 connection instead? If you are an user with a good-standing, you should not have a problem in getting your Service provider to make these changes for you - for free.

Do the same for your Internet connection. Think if you can downgrade your Internet plan - or find a cheaper service. If you are going in for a new connection, compare all services available and bargain to get the cheapest deal available.

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