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Coffee Breaks With ISLM: Easy Saving Tips for the Compulsive Spender





 

Coffee Breaks With ISLM: Easy Saving Tips for the Compulsive Spender


ISLM Writer: Nivedita

In the last post that was also the first post of the Women and Finance series, you read about the importance of financial independence for all women. I hope you liked reading it.
Now let’s move on to the next part—some basic rules that a compulsive spender can easily apply and follow to enjoy a smooth financial life.





Are you a shopaholic? Do you spend a major portion of your income on useless things/activities and fret later in the month? Do you feel guilty for not saving enough and yet cannot control yourself when you see that beautiful dress you were lusting for? Do you spend a bomb of cosmetics or accessories that you regret later?

Are you totally unaware of the different and easy ways of saving money? Do you often wonder how millionaires save enormous amount of money or how an acquaintance amassed so much wealth? Does money, finance and savings confuse you?

Then this article is for you.

Not all of us are lucky like Lisa and as I mentioned in the last post, bills will always be there and unplanned expenses can crop up anytime. So let’s see how you can overcome the ‘money’ problem with relative ease.
1.  Live within your income, by all means: This is a no-brainer! All of us have been told this by our parents countless times—cut your coat according to your cloth. Be ruthless when it comes to chopping off excess expenses. Some expenses that you can easily control are—eating out, shopping frequently, travelling, phone, electricity, laundry bills and so on.
For the compulsive person: If you know you have lesser self-control, ask yourself before making that purchase—is it essential? If no, then postpone the purchase by about 30 days. Chances are you’ll either forget or your temptation or urge of buying will lose all of its intensity. Tried and tested.

2.  Budget: For everything that you buy, there should be a budget. I mean it literally. And there are many types of budgeting sheets available all over the internet that you can download and use. Excel is very helpful in this regard. Download an Excel based template and get going. I make a simple list in Excel.
Tips:
    a)    An Excel sheet will give you a fair idea of your monetary needs and expenses and where all your money is vanishing into.
    b)    If numbers scare you or you are not very analytical, create a pie chart out of the expenses list in the Excel sheet. This visual depiction CANNOT go wrong. You will at once know where you’re overspending.
    c)    I have used some tips given by relatives and colleagues and found them to be very useful. A colleague suggested that most of us are extremely happy during the first 2 weeks of a month when the salary is deposited and hence, we go berserk with spending. So, to apply the brakes, she only made the necessary expenses from the 1st to the 15th. The next 15 days she would buy what she wanted and fulfill her urges. Smart aint it?
    d)    A cousin’s wife gave me this wonderful tip which is pretty similar to the one above. She said she cooks plain meals such as rice, dal and a sabzi from the 1st to 10th day of a month. Then from the 11th to 25th day, she cooks the fancy stuff such as pasta, pizza, non-veg fare and again back to square one from 25th to 30th day. Some discipline there, I must say! And such tips help them to save INR15, 000 each in a city like Mumbai.

3.  Chunk your pay: I have found this tip to be very helpful. As soon as you receive your pay, subtract the must-pay expenses immediately and transfer the rest to a savings account. Once all the payments are met, again transfer the only amount of money you would need to meet your daily expenses.

4.  The expenses towards EMIS, loans or credit card debt should never form more than 30% of your salary.

5.  If you find it difficult it save money compulsively, you must automate your savings. SIPs and RDs help you to automate your savings each month without much pain.

6.  Buying in bulk: We have seen our parents do this all along. But I have seen this does not work for small families of 2-3 people, else things get wasted. Buy as per your requirement.
Tip: I buy the staples from a wholesale grocery shop and this helps me to avoid shopping unnecessary items and reduce the grocery bills by a huge margin.

7.  You must save at least 10% of your income. It is a must.

8.  You must also create an emergency corpus that will be your back up.

9.  Pack your lunch: This will not only allow you to save, it will also help you keep a tab on your weight and health in general.

10.  Lastly, if you have implemented all the above points, pat your back, spend on yourself and party. Because you are important too. The mantra is to save and then spend wisely. Shopping is not a crime if you prioritize it well. Like I shop after 2 months, which helps me curb my shopping urge and save decently too.

And before I sign off, do not forget to compare the government and the private companys’ rates /premia before making any investment. I myself always go for government backed savings schemes as it’s easy on the pocket and reliable too.

So happy earning, spending and saving, ladies!

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