Frankly this blog has not done enough justice to share good ways to save money while spending it! So here are a few thoughts (nothing original, I assure you). You must have heard it in some form or the other. Some ideas are so old that it is being touted as new in the USA. So you know your granny’s mom did it in her times. Of course she copied her mom…and she did not know it meant carbon credits or how she was saving the world. If she were in Obama land she would have patented it….but read on!

1.    Eat at home: Simple granny advise? Good for the health and good for the wealth.

2.    Entertain at home: A movie watched at home (rented or downloaded film) + popcorn+ ginger tea – a far superior combination to the sugary syrup that u get at malls.

3.    Dress appropriately: I once saw an European complaining about the air-conditioning in Hotel Taj President, Colaba, Mumbai. And I was almost shivering. This guy was wearing a thick vest, a silk shirt, a silk tie, an outside vest and a coat. A thick vest + a 3-piece suit is good for Delhi peak winter, not for an a/c which can take the temperature to 18 degrees! I was wearing a Tee shirt. Sounds simple? Well some people do not know it.

4.    Liquor does not solve work problems! It increases credit card debt. Credit card balances are not easy to erase!

5.   Use public transport – you can save the world and some of your bank balance. Incidentally you also burn some calories by force. You save gas if you are a yankee, you save petrol if you are in any other part of the world.

6.    A cycle bought for Rs. 30,000 is cheap if it encourages you to ride a cycle instead of using a car. The money you save on petrol will pay for the cycle in 6 months. After than the cycle is FREE. A car continues to use petrol

7.    Use a cloth diaper for your kid! LOL this advise is from the USA. My great grand mother knew it, my mother knew it, …my wife and sister did not. I hope my daughter does it!! Such an amusing thought. And you cut fewer trees.

8.    Shop intelligently: Not everything is cheap in the same shop. Here is a great business idea of a website which publishes comparative prices for branded / unbranded goods across shops. Many people will love it. Any takers? Just remember you read about it here first. Remember to have a mobile format ready.

9.    Do not buy because a sale is announced. How suddenly people ‘need’ things which are advertised for is quite amusing. Remember a ‘Bringing Up Daddy’ cartoon Hubert saying “I have got poor by the amount of money you saved while buying in a ‘Sale’. Funny? Marketers know it works!

10.    Going for a walk in a mall is a good idea only if you are walking without your purse! Goods are displayed in such a way that even God would have been tempted, be careful.

11.    Pay cash for everything that you buy – including a car. If you decide that you will not borrow, you buy less than what you need. Earned cash seems to be far, far more valuable than cash that is yet to come! If you cannot pay cash without touching your kid’s education money or your pension money, do not buy anything.

12.    I liked this idea from a friend – be friends with guys / gals who compulsorily upgrade everything in their life! Cameras, laptops, cars, – some hand me downs can be nicely put to use. If you keep your ego under control, this could be fun. So when a friend is buying a new house, you can be sure he / she will want to furnish ‘suitably’..you know what to do! The first owner takes the steepest part of the depreciation.

13.    No financial planner who has sold you a product will like this – seek newer term insurance rates. Rates keep falling every week in the US and every month in India. Of course take the new one before you drop the old one!

14.    Make a need list, want list, great to have list and a ‘will keep only if somebody gifts to me list’ and a ‘I hope to acquire it in the next birth’ list! All these lists are dynamic but the sequence should remain the same.

15.    Set up a SIP: nothing works like an automatic transfer of money from an ‘easy to remove account’ to ‘a little difficult to remove’ account. If you see money in a savings bank account you might withdraw, but not from a ‘Money market mutual fund’ account.

16.    Do not buy a house bigger than your current need: The typical broker talk is ‘you will buy a house only once, buy as big as you can’. This is utter nonsense. Buy exactly what you need now, you can find a bigger house when you need one.

17.   Pay at least 50% down payment for the house: This will mean you will pay lesser interest than if you borrowed a higher amount. Also you will buy a smaller house than what the agent / funding company are pushing you to buy.

18.    If you are starting a new hobby set up a limit on how much you will spend on equipment. Limit it to some secondhand stuff before you commit to gadgets,

19.    Stop treating shopping as fun. It is sometimes as bad as alcoholism. Competing with the neighbor is bad. Competing with the shop-keeper is a disaster.

20.    Prioritize what is correct, good, healthy, worthwhile over what is ‘sexy’, ‘cool’, ‘fun’ – normally that could be illegal, immoral and / or fattening.

Will add more…there seems to be a lot of demand for smart spending tips…

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  1. Hi Subra,

    I read this piece bit late, still its worth reading. I like the point (14) because this is what me an my wife keeps updating and acting upon. Rest all points are taken care of.

    Regards

    Atul

  2. Do you know, I am following a lot of these without even knowing that this is good advice.

    Seriously, I have met a few of my goals without having any financial burden and feel free.

  3. Thanks sir for such a great blog site and all articles are excellent. I just mailed about this article smart spending as my husband does not follow many of these things. I like to following most of the things from this article as am originally brought up in middle class atmosphere so its very easy to accepts and implement in real life. whereas my husband side they all lived so called rich, comfortable, cushy life style irrespective of mountains of loans they had and they (husband and his parents) have seen selling of the houses due to loans taken only for luxury. However it is very difficult for me to convince these pple for simple lifestyle and value of saving. these people keep on wasting their money for purely un-necessary items
    thanks sir
    thanks a million for good article
    vidya

  4. Following this article, one will end up with bulk amount of money but with no fun. I do not say that all the points mentioned in this article are wrong, but what will you do with the money in the end. If you dont have fun in life, if you dont extend ur hand to spend on ur hobby or ur passion, u will have to spend that money to some hospitals.

  5. An eye opener in many ways. Fews of these I do follow related to finance. Many which I don’t, will start now. Very useful subra:-)

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