This is an old article which I had written for MoneyControl about 4-5 years ago

Some tips on smart spending!

THE basic needs of man are food, clothing, shelter and entertainment. Today, most of us have graduated from needs to luxuries. When the newspaper headlines were screaming inflation at 11.9 per cent, it became a topic of worry. Today, the challenges are not just high standard of living, high commodity prices, it’s job loss too. How do you deal with meeting your basic requirements with less means to buy them?
While eating just one meal a day is good for Yogis and is a nice way to cut down costs, that is not what I’m suggesting. Instead, Try something simpler.

1. Eat at home!
Eating out can be expensive. If you are spending Rs 200 on eating out compared to Rs 50 at home, you would be surprised to know the kind of amount you are spending. A systematic investment plan of Rs 150 (200-50) a day saved for 30 years can give you returns in excess of Rs 5 crore!

2. Know what you are buying

Plan your shopping. If you fill your cart with everything that catches your eye, chances are you will be spending a lot more. Instead, plan your meals for the week ahead and make careful note of what you need to buy. Purchase only the items on the list, avoid the rest.

3. Wear your blinkers
Stores are designed to make you go through a long walk to reach for your most basic items. Reason — you can tricked into buying what you don’t really need. Most basic commodities are found towards the end of the store. So, the next time you go shopping, you could skip the other outlets and move towards your destination. Lower priced products are placed at the lower levels – not at eye-catching levels!

4. Shop on a full stomach
When you’re hungry and shopping, you may end up buying lot of things that look like food! You might also pick up what you don’t really need. On the other hand, you can easily avoid unnecessary shopping when you’re a full stomach.

5. Do you really need bottled water?
You can take a bottle of water when leaving home rather than buying when you’re out.

6. Use public transport:
The amount of money you can save while using public transport is amazingly high. Think of parking charges, petrol, car depreciation, etc. It is also good for your health – the walk to the nearest bus stop or railway station, climbing the stairs, are all good cardio vascular movements and helps your heart.

7. Shop sans the kids
Hungry, tired, cranky kids increase the amount of time it takes to get your shopping done. Kids can really bug you into buying things which are bad for your health and for your purse. Leave them at home when you go out shopping.

8. Buy in bulk
You can save a significant amount of money if buying in bulk. Pay attention to the prices and pick up the family size package if the per unit cost is lower. However, you need to realise that bulk buying has a dark side too! If you are not a big user of any particular product, it could mean wastage. In a worst case scenario you might throw away the excess, or use more – just to get rid of it. Both these actions actually increase your usage instead of reducing your costs.
9. Use store reward cards / coupons
If you visit a particular store often, you can sign up for their reward card. In some cases, stores raise their prices when they offer reward cards, and without the card your bill will certainly be higher. If the card offers other benefits, such as a preferred (or free) parking, free schemes, etc., be sure to maximize your benefits before they expire. Many newspapers carry coupons which entitle you to some discount on the things you buy. If you find coupons, use them.

10. Buy local products
For instance fruits. Whenever I step into a big branded store, I was pushed into buying ‘American grapes’. I fell for it once, and realized only on billing that it was Rs 400 a kg! The Indian variety is normally available for Rs 40. Locally grown or produced food is often available at a cheaper price because you don’t pay for long transportation costs, American labor costs, American insurance, etc.  Stick to foods grown locally. This is good even from a health point of view.
11. Choose unbranded goods
There is a huge cost difference between a branded product and an unbranded one. Even in case of ‘expensive’ items like dry-fruits, if you buy it from a wholesale-retail shop you will find a 20 per cent price difference. Some branded foods like cornflakes, are more expensive than dry fruits on a per kilogram basis. If you thought potatoes were selling at Rs 18 a kg, you are correct, but when it gets converted to branded chips, it becomes a little expensive, about Rs 350 a kg!

12. Men are bad shoppers
It is not so much of a gender issue. But the truth is men do not have much patience and that shows while shopping. So, if you are a man, realize that shops know and understand this. So things are arranged in such a way that when you are in a hurry you will end up buying the most expensive items. Look around to find cheaper items.
13. Compare prices and stores
I personally do not compare prices and stores but my wife has a degree in this! She knows which shop is good to buy vegetables, branded goods, unbranded goods. And she plans her shopping accordingly.

14. Shop in sales offers
In India, September to December months are considered as ‘festive season’. This is the time when most of the shopping happens. Surprisingly, Hindus, Muslims and Christians have some festivals for which they buy new clothes during this period. So, stores generally keep a pre-festive sale in July-August and a post-festive offer in January. Use these sales to build your wardrobe. You can even get good deals!
15. Shop less frequently
The lesser the number of trips to the shop, the lesser you will buy! So, if you are making more trips to the store, it is time you reduced them.

16. Pay in cash
When you buy your day-to-day requirements with your credit card, you run the risk of paying your credit card dues late. So, for all the saving you have been doing, you may give it away in the form of interest. Cash is a good option. Besides, you tend to be more careful when making cash payments.
17. Check your bill
You should check all the statements which have a financial implication be it your credit card statement, mutual fund statement or your groceries bill. Scanners are fine, but there are possibilities of mistakes. So, you must see the bill before you pay.
18. Buy leather goods in monsoon and umbrellas in winter!
Buying goods in off season will cost you less. If it’s monsoon, check out for sale on leather goods and umbrellas in winter.
19. Use solar or gas appliances:
Even in places where piped gas is available people do not shift to gas water heaters / gas air-conditioners. It is amazing to see the number of people in Ahmedabad (Gujarat, India) who have shifted to gas – for economics not just because electricity is available. Do not dismiss a saving of Rs. 300 per month as trivial – see the impact over a few decades.
20. Use energy saving lamps, there is a big difference in your electricity bills.

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  1. Sir its so good to read this article as first thing today. Just 5 minutes back my mother in law made fun of my frugal nature and I was feeling little low. 🙁

    How can I make these people understand that I don’t waste my money because I will not have any pension and medical benefits (CGHS) in my old age.

  2. What affects a common man with rise in inflation.

    Grocery bill : For most, it is 10% of our salary spending.

    EMIs : Rise in floating rates. Auto & Personal loans would not change (50% of our Salary)

    Monthly bills : Telephone, Electricity, Water, Petrol, Gas, School fee (20-30%)

    Misc : Medical, Travel, Hotels, Gifts or investments etc..

    When we talk about inflation, most of the focus is on groceries which is 10% of the household budget. Inflation of 10% is 11% of household budget in a year. On an average, employees are getting 5-10% hike on total wage. Since cheaper alternatives are always avaialble for every product, I am sure it takes for a while to feel the pinch of inflation.

  3. Indian Thoughts: Please dont feel low. You are on right track and you are not doing any bad thing. You can find lots of such people in society. But one thing i can say that in long term you are in better position than these people. Today I feel that we are forgetting our ancestor teachings like “Jitni Chadar ho utne pair failane chaiye”. They always teach us vry good lesson that loan is bad thing and try to avoid it. I feel very sad when i heard that people are getting loan for consumer durable.

  4. Indian thoughts: Don’t worry, you will have the last laugh! Thanks to my frugal habits – I can really enjoy life and lifestyle now!

    Please rest assured you thinking is correct!

  5. @Krish – Grocery/Vegetable/Fruits bill increases at 10% per MONTH – if you opt for the best quality food/vegetables! People just don’t realise it. Thats all. I for one have cut down on packed FRUIT JUICEs!

  6. indeed comprehensive list! i like to add one read on other blog today only: for mobile phone and net , keep checking the new cheaper plans from your provider and the from competitor providers.

  7. Some times I don’t know what to say when my colleagues complain about increasing gas prices and the next minute discussing about an auto loan for car!!!

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