The onslaught of Covid-19 has taught us that saving money, even in small amounts, will never run out of fashion. After all, little drops make the mighty ocean.
In times like this, where uncertainty is looming on every facet of life, managing finances always keeps one on one’s toes. The onslaught of Covid-19 has taught us that saving money, even in small amounts, will never run out of fashion. After all, little drops make the mighty ocean.
We may ignore small changes in our life, disregarding the impact they collectively have on us. So are our suggestions. They might seem small, but when they are collectively adopted, they help one save a huge amount of money in the long run.
Here are a few measures that you can adopt on a day-to-day basis to save some costs.
The first step for effective money management is budgeting. Budgeting ensures we stick to a plan and don’t overshoot targets. We need to always remember that the way compounding works in investments, the same way it also inflates expenses to stratospheric levels risking our entire financial planning. It is hence important to plan for future goals considering the cost at the time of goal.
“Let’s say you plan to send your kids for higher education overseas and estimate the costs at Rs 50 lakh, however this goal is still 10 years away in which time these Rs 50 lakh could have become Rs 75 lakh or Rs 100 lakh, depending on the exact geography / institute etc. Similarly, for any other goals like wedding / retirement, it is imperative to adjust the goals for inflation,” says Udit Garg, Member, Founding Team, Goal Teller.
2. Buying refurbished products
What are refurbished products, you might ask. These are products that have been previously returned to a manufacturer or vendor for various reasons and then they are normally tested and repaired before they are re-sold to the public.
Refurbished products, at a lower price, maintain the standard quality that one might expect from the manufacturer and may also come with a warranty by the seller.
There are various websites online that deal in refurbished products. A small word of caution though, such purchases should be made with a lot of discern and homework, especially for critical items.
3. Smart purchasing
Follow these interesting tips while purchasing for your home/ self:
# Pre-plan your purchases and collaborate with your neighbours/ relatives to purchase goods in bulk quantity and avail better discounts.
# Time your purchases for the next season a year before. Aim for the end of season sales to get better prices.
# To avoid emotional buying, wait for a day to close any premium off the list item that you want to purchase. This will help avoid succumbing to instincts.
# Always stay on lookout for offers provided by different payment portals while making purchases.
# “Various credit cards reward cardholders for their payments in reward points which are redeemable against a host of products / travel vouchers / fuel etc and hence it always helps to choose a card that has rewards that are suitable and useful to you. For example, if you travel a lot, it might be wise to buy a card that has high rewards on travel/travel vouchers,” says Garg.
# Credit cards charge heavy penalties as interest and late payment fee. So, it is absolutely essential that we pay the bills in time. Automatic payment facilities can also be set up to avoid late payment fees.
4. Quality over Price
While purchasing any high-price tag product for your home, consider quality over price. “It is always wise to pay a higher sum for a better product and save money on hefty repairs and replacements. At the same time, we also need to keep in mind that higher price does not always assure quality, and hence, it is important to consider the reviews and the after sales services of the product,” Garg says.
Electricity is often ignored but is a very important aspect that should not be overlooked. A few suggestions below could help in reducing or optimising this spend:
# Keep the temperature setting on the Air Conditioner at an optimal level of around 23-25 degrees.
# Bucket wash over showers.That helps conserve water and also reduce load on the water geyser, enabling significant impact on electricity consumption. This can be topped up with the geyser being on only for a specific time period every day which will further help the cause.
# Other small measures like switching off the water purifier at night, switching off computer systems etc contribute towards this objective.