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Old 9th February 2020, 11:14   #16
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Default Re: Ways you save the penny!

Its somewhat the opposite in my case. I seem to be saving more than what I might need and am quite thoughful in most of my spends even in areas am very passionate about. For eg. Just recently when I bought a new car I put the budget at 10 lakhs and actually bought a car for 7 lakhs. Similarly when I had to upgrade my DSLR I started off with mid model in mind but finally went for entry level model. As of today I have been quite content with all my decisions as I feel that I was not using all these purchases as I should have.

From last year I also got interested in finances and investments which is making me allot higher percentage of income to various investment options. So my goal would rather be to spend more open heartedly on things I am passionate about and continue to manage other finances as it is.

One sureshot way that can be adopted to save electricity and hence money is put room AC temp at 26-27. I have been living in Delhi since birth and have never faced humidity or cooling issues keeping temp at 27 even in June. Just make sure to have AC serviced regularly and go for the latest star rated AC whenever buying new ones.

Last edited by Chetan_Rao : 9th February 2020 at 18:30. Reason: Typos.
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Old 9th February 2020, 11:49   #17
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Default Re: Ways you save the penny!

On a side note, this thread might bring out all the ideas, however a very important factor to actually saving and investing heavily depends on having a partner/spouse who understands and is in sync with you on it. Else...
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Old 9th February 2020, 12:09   #18
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As many have advised, first thing to savings is to write down every expense and go through the expense at the end of every month with your life partner. It gives a lot of insight into where your money is going. Based on past expenses, charting a budget helps a lot.

For salaried folks, savings (RD etc) should go from the salary account on the day of salary itself. Spend what is left over after savings, not the other way.

We waste lot of money by wasting food, that too cooked food. We spend money, cooking fuel, time and effort on that last bite that we waste at the end of every meal. Never take too much on your plate, we are not hunting and gathering anymore, we are sure of our next meal.

When you feel the 'want' of buying something keep a notebook where you can raise a purchase order to buy anything, except essential items like grocery. Then wait for a month before buying it. Many times, we will reach the conclusion that we don't need that item. If it is big ticket item, wait for at least six months. This helps to avoid impulsive shopping. Remember online shopping is not the cheapest way of buying things, but just the easiest way!

Ads create psychological pressure to own things, so avoid as much as possible.

Keep your carbon footprint as low as possible, it helps to save money indirectly.

Last edited by Romins : 9th February 2020 at 12:12. Reason: typo
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Old 9th February 2020, 12:11   #19
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Though I've just started my career, I make it a point that I put 30-40% of my income in chits(invest in a chit only if you know the person well and if they're trustworthy), I give 10-15% of my income to my parents and sibling and the rest 40-50% I keep for the month for my expenses which is sufficient for a 23 year old adult. Office transport and office gym is for free and I make use of it. I use my vehicles only on weekends for long drives or weekend trips.

One ground rule I've made for myself is never to take credit from others and a Big NO to a credit card. These are two things which can ruin a person's life if not handled properly.
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Old 9th February 2020, 12:48   #20
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Originally Posted by sreerknair View Post
I would say it is more appropriate to think about how to generate more money than worry about how to save. Most of us think only about saving and forget about how to invest, and earn more. I am not negating the importance of saving, but you achieve more if you slightly change your perspective.
Originally Posted by saket77 View Post
In short, the following should give the idea what I am saying:

Wrong: Income-Expenditure = Savings;
Right: Income-Savings= Expenditure
Wise words from two members.

Gentlemen, my views may not match with many of those expressed. No ill meant.

Too many of us stay focused on counting the pennies spent because we saw our grand parents and parents do that. Without at least some serious focus on earning more income and a lot of focus on forced savings we donít get very far. Though the penny counting and writing the accounts of each rupee spent does give a feeling of achievement that we are doing something.

Some unasked for advice Ė apologies, that's what folks my age love doing!. If you are young enough, ie below 40/42, then start putting some money down each year into a pension fund with some life insurance of your choice. One day like me you will approach retirement age and starting 10 years before that is usually too late. The returns are average but the discipline forces you to save into a pool you normally cannot touch and which on maturity converts into a monthly annuity income for life. All life insurers have it. If you don't work for the Govt this is the next best way to ensure a pension.

Second piece of uncalled for advice is to take out the most comprehensive health cover you can on your own dime today when you are young and all your spare parts are functioning. Even if you have medical cover from your employer take it out and let it get renewed each year. One day you won't have employer health cover and then at 60 the health insurance will be prohibitively expense to take out for the first time and several health items will be carved out if they feel you are at risk. Take it out for your family as a group - mixing the young with the old helps the effective premium. We did this many years ago and it has served us well and as the track record for the family as a whole has been healthy the old in the family also get covered.

Always buy (to live in) the best highest status house/apartment that you can afford at that stage in life. If your income rises (as it does for most) and inflation creeps in (as it inevitably does) the pressure of that housing loan becomes more and more easy to manage as the years go by. I believe you should feel proud of the quality and locality of your home.
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Old 9th February 2020, 13:01   #21
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Financial independence -

Writing down our expenses is the key to save money. The money we save should also give us good returns in the future. If you feel saving is a miserable thing to do, think how much more miserable it would be to be left with no money in old age.
My policy - Work Hard, Get Rich, Stay Humble. Looking rich and being rich are not one and the same. You can look rich even with debt. If you're really rich, you can decide whether or not to look rich. Both are fine.

When you have got an emergency fund worth two years of expenses, you'll be less afraid of your boss. You'll have sufficient time to look for another suitable job. This is the first milestone in the journey of financial independence.
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Old 9th February 2020, 15:16   #22
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I lock up my money in some investment instruments. So have no money to spend. There was a time when I wondered why my account was always zero. Yes one might argue that the interst rates/ROI is not too high but a year down the line I will be able to have a corpus for my home down payment.

Give the feeling you don't have too much to spend, you don't spend.

Last edited by Chetan_Rao : 9th February 2020 at 18:24. Reason: Typos and punctuation.
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Old 9th February 2020, 18:21   #23
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In addition to some of the stuff mentioned, some other ways I have saved money.

Get a Club Membership if not too expensive - At the expense of sounding poncy - If you have put down roots and like a social life. Become a member of a good club nearby. For me, entertaining and eating is relatively cheap. I shop from the department store where I get 5% discount and credit for upto 45 days.

Limit club Membership to a couple - Dont become a member of two many clubs. I have stuck to two. I would have become member of a third but I saw no benefit.

Gadgets and other items - avoid buying simply for an upgrade. Upgrade when you efficiency is really impacted or you are dying for it. I still use an iPad 2 but it has slowed down that it is time for something new

Stick to a strict diet - Our household expenses have diminished until my daughter comes for holidays.

Avoid live-in servants - My daughter has gone away. We no longer need anyone at home full time. Our food and power expenses have almost halved.

Adopt a Cougar - I see a lot of 5 year old cars in mid-life but well kept. Bought one for my wife, another friend bought an Audi for a song. Budget for higher repair costs but it beats EMI's and depreciation.

Shop Around -There is always a deal

Research and execute a deal fast - Plan your upper and lower limits of what you buy and sell and execute immediately. Ensure you know the process be it land, cars or whatever. If you dither, costs go up!

Dont be the first - So you were the first with the Hector or the Seltos. Was that first month of fame worth it? Soon, there will be discounts when the Harrier Auto emerges and also the new Creta

Avoid Loans - I have only taken loans for investment property and two cars. I hated it but I wanted to balance liquidity. I always made sure that I had enough funds to foreclose.

Pay for Good Advice - The fees paid are offset by reduced hiccups, clarity and avoidance of fines/penalties. No, google cannot solve your issues. You need the detail that professional advice brings!

When on Holiday - Take a tour only if logistics are difficult or you are time constrained. Tours are expensive, you need to tip - the guide and the driver. It adds up. Most tourist cities have decent public transport. Again, there is always Uber.

Last edited by ajmat : 11th February 2020 at 07:36.
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Old 9th February 2020, 18:29   #24
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I don't own a credit card, as i feel there's a tendency to overspend!

Infact, I did not even have a debit card for the longest time. I prefer carrying cash in my wallet, so that i can keep a check on the outflow.
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Old 9th February 2020, 19:06   #25
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I believe It is all about understanding the difference between NEED and DESIRE. If anyone wants to save his money he should spend more on his needs rather than desires.
I am just proud to be a part of this wonderful community. TEAM BHP has become a part of life!
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Old 9th February 2020, 21:14   #26
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Great thread. For me it’s about not putting a premium on the latest and greatest , but indulging on the small benefits in life.

There is a saying.. “What you own, owns you”

I don’t spend a bomb on the latest gadgets, my budget is limited to 20K for phone and 40 k for a laptop. I don’t believe in buying the best money can buy as they always charge a premium. I spent ~40K on my 55 inch Mi TV. I know the purists may scoff, but I don’t spend more than an hour at home watching my TV per day and see no point getting all worked up over better picture quality. The only two purchases I did, maxing out on what I can comfortably afford is 1. House and 2. Car. I make sure the combined EMI is not more than 40% of my take home. In about 3 yrs time after initial loan, this becomes 25%. of take home , which is super comfortable.

I don’t mind indulging in the occasional charity or Leaving a semi generous tip at a hotel, or once in a while splurging at the local PVR.

I also started mutual funds SIP s recently.

My golden rule : do not spend or invest to a point where you loose your peace of mind. Nothing’s worth it.
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Old 9th February 2020, 22:20   #27
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I guess our biggest frivolous spending is on clothes and eating out. Here is an article that provides some savings tips:

Last edited by pradkumar : 9th February 2020 at 22:23.
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Old 9th February 2020, 22:31   #28
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Interesting topic, thought I'll bring the thread back to the basics - how to SAVE, so I'll exclude earning or investing opportunities as those come in the income side of things. We are looking at how to save what comes from the income here.

This is something I was good at since my schooling days thanks to parental influence.. I always believed even then that the mantra of surviving life is to work hard and save hard, over time I evolved it to work smart, save smart as my career started. Even in my youth, I put away coins (had thousands of rupees of them in a lunchbox), saved pocket money (50% plus) took the bus, and had about 15k saving after 10th. I think I spent it pretty fast that vacation for expensive Nike shoes and stuff but felt less guilty of doing that as it was saved up and I didn't have to trouble parents for that.

Even in college as most of the well off classmates blew many thousands in cigarettes, alcohol, snooker games, bets etc, I still stuck to my very conservative ways. This turned out to be the best learning for me for life, saving is a way of life, a sacrifice and something that can be slightly modified but nevertheless should be stuck to irrespective of financial strength.

For years now, I've seen people my age, who started working before me, save next to nothing.. why? Expensive restaurants, movies every week, alcohol binges every week, vacations and long drives, multiple vehicles under EMI like bike+car, phones under EMI even, etc. I have no desire to travel, even less desire to drive, happy with simple food most of the time, no alcohol expenditure at all. We always bought vehicles cash down. I do splurge occasionally but in a 1:10 ratio of people I know. The result is I've saved maybe double or triple in comparison to peers. Nothing to be proud of as I know that wealth fluctuates without reason sometimes but still its how I've grown up and know no other way. I just need a great sleep at night and doing this helps me sleep sound.

In summary, attack the real culprits of overspending - bar outings, movies, mall hopping, vacations (expensive hotels, road trip fuel costs etc) and worst of all paying for all of them by credit card and only paying basic installments on them, the interest rates will wreck you. I use only debit card. Easy to save 10k odd per month doing those. Also the truth must be told, the number one useless expenditure by miles according to me is car wash costs, detailing costs, accessories costs, service charges which are becoming exorbitant etc, if one can wash a car by oneself and avoid the lure of treatments and accessories then that's far more savings than one can begin to understand.

You can keep saying stuff like money is meant to be spent, or that curbing expenses would lead to not living a full life - that is true as well.. which is why a planned balance is required between overspending and oversaving. It's an art which we'll keep evolving and improving at, and each one will have a different way since it's heavily based on our unique life experiences and financial backgrounds since being born.
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Old 10th February 2020, 00:24   #29
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I believe that old conservative practices will prevail in the long term. Taking money on loan was considered as the last option and the focus was to accommodate your expenses within your income.

I personally believe that our lifestyle should change in accordance with our income. I don't see a point in purchasing a iPhone X when we are earning 20000 per month or puchasing a 15-20 Lacs car when my salary is say 50000 INR per month. Our expenses should be towards a lower side even if our income increases. With rise in income, our savings should also increase.

I have started SIP of 25000 per month in mutual funds since 6-7 years to have some savings for future or emergency. I also contribute 50000 per year to my NPS account. Home loan is already short closed. So no EMI burden as on date. Now focus is to invest in something which will give me fixed rental/other income after my retirement which is still more than 20 years away.
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Old 10th February 2020, 05:26   #30
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Very interesting topic. Even though it is very basic stuff, I came across this concept recently. Estimate our monthly expense, divide and part remaining amount in different heads like short term, long term goals and emergency funds. Try tweaking the proportion based on individuals and may be continuous process.

Once we are into the track it would be a smooth ride. Throughout the journey get rid of the high interest paying loan first and get control of debts.

Ways to save money could be.

1. Go for slightly lower home loan and keep renegotiating and switching
2. Opt a decent pre-owned car instead of a brand new one
3. Minimise eat outs and food delivery services
4. Renegotiate all insurance policies when they come up for renewal
5. Can use a credit card and pay all bills using this and pay in full home loan offset account. But many are against credit card use. So debatable.

The list is never ending because everyone's situation is different.
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