Today's thought on saving money is inspired by those people around me who says and believes, it is difficult to save money, the expenses are increasing, prices are skyrocketing. But, these statements are only one part of the story.
The other part is, people are also getting pay hikes. Everyone is searching for how to get a pay hike???
Though people are saying saving money is becoming more and more difficult, I see this condition as blessing in disguise. You must be asking how? Well read on..
Rising prices and rising expenses means rise in total money at stake. Which means you can get more money saving in little efforts. Just like in one case a small turn of a steering wheel can change the direction of a 1 ton car but in other case changes the direction of a giant 100,000 ton container ship. The effort is the same in both the cases but the difference in the outcomes is dramatically different.
So lets dwell over usual household expenses and saving money ideas or or in other words money saving tips for dummies- ๐
1) Save money on gas-
Most of the people reading this blog are using gasoline powered vehicles for transportation purpose. And it is a big consumer of money. On an average more than 10% of monthly spending's of a middle class family are consumed by traveling expenses. Therefore saving on these spendings can have a big impact on the total money saved.
In my case I used to spend more than 30% of my monthly spendings on commuting. Also used to spend 3 hours a day in commuting. Then I shifted to a location close to my office and now I spend only about 5% of my monthly spendings on gasoline. Most of which is because of leisure travelling.
Using a bicycle or bike is also another way of saving money both on gasoline and medical bills too.
Even if you must need to use gasoline or diesel powered vehicle then you can save on fuel costs by properly maintaining the vehicle and using proper driving techniques.
You can read about it HERE - The power of compounding- 10 ways to improve your bikes mileage
2) Disease prevention money saved-
Diseases are like ghosts which catch us in wrong timings and drain much of our hard earned money. Disease prevention is a very easy think than what it sounds. You just need to understand your body and make it strong. Even if you catch any infection, you can help your immune system fight that infection, in the process also making it stronger. Disease causes loss of time, loss of earning, loss of money, loss of mental peace and suffering.
It can be easily prevented or cured. Just read the posts
A) Ageing and Anti-Ageing - 2 of the most popular words in cosmetics advertising.
B) 3 most important aspects of living
C) The Language of Exercise - Our way towards being Healthy
D) 3 Important Aspects of Living - DIET
E) What do I do when I get ill??
F) No. 1 Misconception about great health
3) Save money life insurance policy-
You must be thinking this heading is weird but, Save money on life insurance policy is for those people who are obsessed with life insurance policies or who are victims of life insurance policy mis-selling or those who are financially illiterate. Most of the people opting for the life insurance policy see it as an investment option.
The purpose of life insurance policy is to support your dependents after accidental death or disablement of insured person. Generally these insurance policies invest the policy money in some fixed return money market instruments. These instruments give low rate of return, then again there are administrative expenses and marketing expenses, the commission of the insurance advisor etc. After subtracting all these expenses, the policy holder gets very meagre returns which are not even up to the inflation rate, do if you are seeing it as an investment instrument then you are probably wrong.
This money could have been invested somewhere else where returns are high, and you could have earned a lot more than in life insurance policy. That means you lost the opportunity to earn more returns, which can be treated as expenses. That is why inclusion of this heading in this post.
This loss of money or purchase of a life insurance policy can be avoided by investing the money in higher return options like investing in share market or if you don't have ability to search for good companies at good price then you can simply follow a systematic investment plan developed by you, investing in to index funds. (invest more when market is down and invest less when market is making highs) You will definitely build a great amount of wealth in this way. And just teach this way to your dependents so that they don't need to take any outside help when any unfortunate event happens. You will save much more money this way, rather you will build wealth and be a great example for your dependents and friends.
But sometimes it is absolutely necessary to purchase a life insurance policy like when you take a big loan from bank or financial institutions. They make it compulsory to keep an insurance policy as a collateral. At such times opt for pure insurance and not the insurance come investment product.
Do remember one thing- insurance and investments are totally different things, do not mix them together.
4) Saving money at grocery store-
A big and necessary part of our spending goes in the grocery shopping. Therefore saving money at grocery store is a very effective thing if you want to save a lot of money.
Saving money at grocery store is actually very easy. Jus some little tweaks and you will save a lot of money.
You need to understand the sources that cause you to lose money and steer clear of them.
Two of the biggest sources of losing money or wasting money while grocery shopping are, falling victim to different marketing techniques and falling victim to our own psychological biases while shopping.
A very effective technique to avoid the marketing techniques and our own psychological biases is to pre-plan our trip to the grocery store in the following steps-
➡ Just plan the trip to the grocery store at the comfort of your home. When you are at your home, you are free from any marketing tactics or even your own psychological biases.
➡ Plan your trip at the time when there is little rush at the grocery store, so that you will have less effect of many biases caused by being in a herd.
➡ Make a list of items you want to purchase. Write it down in your smart phone or on a piece of paper like old fashioned way. Include all items in a sufficient quantity so that you won't have to go for grocery shopping for at least a month again. Wholesale purchases will also save you money.
➡ Go to the grocery store at the planned time, collect the items in your list as early as possible. (do it fast so that you will be exposed for the marketing tactics and your own psychological biases for a little amount of time)
➡ Avoid impulse buying. Don't buy the things other than your list, this is not the last time you are going for grocery shopping. So you can add the thing you thought about purchasing the next time(if you think it is needed even after days of your visit to grocery store).
➡ Ask for a discount or go to wholesale grocery stores in your are.
Falling victim to marketing tactics or your own psychological biases can cost you up to 30% of your grocery spendings at the grocery shop itself, and then there are side effects like your home will be crowded with useless fancy items and a small bank balance.
So if you follow the above steps carefully, you will save up to 30% of your grocery bills.
5) Save money online-
Online stores have the advantage of less fixed costs, less cost of real estate, ease of purchase. Therefore they can operate on low margins and high volumes, can serve a large geographical area. That is why there are more chances of you finding a great deal online, at the comfort of your home itself.
But there is a catch, don't just browse etailers if you don't need to buy anything, because again there marketing tactics will creat needs in your mind for the things they sell.
So if you need to buy something, for example a cellphone, then decide what are your needs first then, visit different sites, check the specs and prices, decide which models are fulfilling your needs in your budget and then search for the least price for that model. This is the way to shop online to get most value out of your hard earned money.
6) Money saving vouchers -
You will get money saving vouchers in emails, sms, news paper, fliers etc. These vouchers are designed to creat need for the product in your mind plus striking deficiency bias (limited period offer, or offer till the stock lasts etc) increasing the perceived value of the product much higher.
So my take is just don't pay attention to these vouchers. Mostly these vouchers are for products which cannot be sold normally because the product is not that useful or it is very costly.
Sometimes you may get a bargain deal but for that you must maintain a cool head and can be able to filter out useless vouchers without affecting your thinking.
7) Save money on weddings or other social functions -
It may sound weird but I have seen many people or generations of many families just accumulating the money for weddings of their children or other family functions.
They want it to make it grand. They think it is a once in a lifetime event so it must be celebrated in a grandest possible way. It is a show off kind of mentality. People boast about the money figure they have spent on their kids birthday or wedding etc. Their is a race to spend more and more money on such functions. They intend to show their higher status by spending money on such functions.
I do agree that they are once in a lifetime functions but then there are many such once in a lifetime functions. People should see it as a form of get together only and not the media to show their status. Status can be seen in day to day life itself, there is no need to show it off. And the most important thing is the inner satisfaction. If you are able to show off higher status but lack mutual understanding in the family, or there is a lack of family values then what is the use of the status then?
If people are only going to the high status people for the money then it is a sign that such people are not useful in the time of need. Such people can't be trusted. And trust me if you just skip such people and go ahead then you will find good people, though they are just handful, they will always be there for you.
I suggest to spend only a minimum amount of money on such functions depending on your financial condition.
Don't ever spend all your savings on it. Get the financial freedom before getting in to such expenses.
That's it for now.
Please share your views in the comments section.
See you soon.
Till then have a nice day..
Sumit
The POWER is when,
You use ODDS,
To get EVEN.
The other part is, people are also getting pay hikes. Everyone is searching for how to get a pay hike???
Though people are saying saving money is becoming more and more difficult, I see this condition as blessing in disguise. You must be asking how? Well read on..
Rising prices and rising expenses means rise in total money at stake. Which means you can get more money saving in little efforts. Just like in one case a small turn of a steering wheel can change the direction of a 1 ton car but in other case changes the direction of a giant 100,000 ton container ship. The effort is the same in both the cases but the difference in the outcomes is dramatically different.
So lets dwell over usual household expenses and saving money ideas or or in other words money saving tips for dummies- ๐
1) Save money on gas-
Most of the people reading this blog are using gasoline powered vehicles for transportation purpose. And it is a big consumer of money. On an average more than 10% of monthly spending's of a middle class family are consumed by traveling expenses. Therefore saving on these spendings can have a big impact on the total money saved.
In my case I used to spend more than 30% of my monthly spendings on commuting. Also used to spend 3 hours a day in commuting. Then I shifted to a location close to my office and now I spend only about 5% of my monthly spendings on gasoline. Most of which is because of leisure travelling.
Using a bicycle or bike is also another way of saving money both on gasoline and medical bills too.
Even if you must need to use gasoline or diesel powered vehicle then you can save on fuel costs by properly maintaining the vehicle and using proper driving techniques.
You can read about it HERE - The power of compounding- 10 ways to improve your bikes mileage
2) Disease prevention money saved-
Diseases are like ghosts which catch us in wrong timings and drain much of our hard earned money. Disease prevention is a very easy think than what it sounds. You just need to understand your body and make it strong. Even if you catch any infection, you can help your immune system fight that infection, in the process also making it stronger. Disease causes loss of time, loss of earning, loss of money, loss of mental peace and suffering.
It can be easily prevented or cured. Just read the posts
A) Ageing and Anti-Ageing - 2 of the most popular words in cosmetics advertising.
B) 3 most important aspects of living
C) The Language of Exercise - Our way towards being Healthy
D) 3 Important Aspects of Living - DIET
E) What do I do when I get ill??
F) No. 1 Misconception about great health
3) Save money life insurance policy-
You must be thinking this heading is weird but, Save money on life insurance policy is for those people who are obsessed with life insurance policies or who are victims of life insurance policy mis-selling or those who are financially illiterate. Most of the people opting for the life insurance policy see it as an investment option.
The purpose of life insurance policy is to support your dependents after accidental death or disablement of insured person. Generally these insurance policies invest the policy money in some fixed return money market instruments. These instruments give low rate of return, then again there are administrative expenses and marketing expenses, the commission of the insurance advisor etc. After subtracting all these expenses, the policy holder gets very meagre returns which are not even up to the inflation rate, do if you are seeing it as an investment instrument then you are probably wrong.
This money could have been invested somewhere else where returns are high, and you could have earned a lot more than in life insurance policy. That means you lost the opportunity to earn more returns, which can be treated as expenses. That is why inclusion of this heading in this post.
This loss of money or purchase of a life insurance policy can be avoided by investing the money in higher return options like investing in share market or if you don't have ability to search for good companies at good price then you can simply follow a systematic investment plan developed by you, investing in to index funds. (invest more when market is down and invest less when market is making highs) You will definitely build a great amount of wealth in this way. And just teach this way to your dependents so that they don't need to take any outside help when any unfortunate event happens. You will save much more money this way, rather you will build wealth and be a great example for your dependents and friends.
But sometimes it is absolutely necessary to purchase a life insurance policy like when you take a big loan from bank or financial institutions. They make it compulsory to keep an insurance policy as a collateral. At such times opt for pure insurance and not the insurance come investment product.
Do remember one thing- insurance and investments are totally different things, do not mix them together.
4) Saving money at grocery store-
A big and necessary part of our spending goes in the grocery shopping. Therefore saving money at grocery store is a very effective thing if you want to save a lot of money.
Saving money at grocery store is actually very easy. Jus some little tweaks and you will save a lot of money.
You need to understand the sources that cause you to lose money and steer clear of them.
Two of the biggest sources of losing money or wasting money while grocery shopping are, falling victim to different marketing techniques and falling victim to our own psychological biases while shopping.
A very effective technique to avoid the marketing techniques and our own psychological biases is to pre-plan our trip to the grocery store in the following steps-
➡ Just plan the trip to the grocery store at the comfort of your home. When you are at your home, you are free from any marketing tactics or even your own psychological biases.
➡ Plan your trip at the time when there is little rush at the grocery store, so that you will have less effect of many biases caused by being in a herd.
➡ Make a list of items you want to purchase. Write it down in your smart phone or on a piece of paper like old fashioned way. Include all items in a sufficient quantity so that you won't have to go for grocery shopping for at least a month again. Wholesale purchases will also save you money.
➡ Go to the grocery store at the planned time, collect the items in your list as early as possible. (do it fast so that you will be exposed for the marketing tactics and your own psychological biases for a little amount of time)
➡ Avoid impulse buying. Don't buy the things other than your list, this is not the last time you are going for grocery shopping. So you can add the thing you thought about purchasing the next time(if you think it is needed even after days of your visit to grocery store).
➡ Ask for a discount or go to wholesale grocery stores in your are.
Falling victim to marketing tactics or your own psychological biases can cost you up to 30% of your grocery spendings at the grocery shop itself, and then there are side effects like your home will be crowded with useless fancy items and a small bank balance.
So if you follow the above steps carefully, you will save up to 30% of your grocery bills.
5) Save money online-
Online stores have the advantage of less fixed costs, less cost of real estate, ease of purchase. Therefore they can operate on low margins and high volumes, can serve a large geographical area. That is why there are more chances of you finding a great deal online, at the comfort of your home itself.
But there is a catch, don't just browse etailers if you don't need to buy anything, because again there marketing tactics will creat needs in your mind for the things they sell.
So if you need to buy something, for example a cellphone, then decide what are your needs first then, visit different sites, check the specs and prices, decide which models are fulfilling your needs in your budget and then search for the least price for that model. This is the way to shop online to get most value out of your hard earned money.
6) Money saving vouchers -
You will get money saving vouchers in emails, sms, news paper, fliers etc. These vouchers are designed to creat need for the product in your mind plus striking deficiency bias (limited period offer, or offer till the stock lasts etc) increasing the perceived value of the product much higher.
So my take is just don't pay attention to these vouchers. Mostly these vouchers are for products which cannot be sold normally because the product is not that useful or it is very costly.
Sometimes you may get a bargain deal but for that you must maintain a cool head and can be able to filter out useless vouchers without affecting your thinking.
7) Save money on weddings or other social functions -
It may sound weird but I have seen many people or generations of many families just accumulating the money for weddings of their children or other family functions.
They want it to make it grand. They think it is a once in a lifetime event so it must be celebrated in a grandest possible way. It is a show off kind of mentality. People boast about the money figure they have spent on their kids birthday or wedding etc. Their is a race to spend more and more money on such functions. They intend to show their higher status by spending money on such functions.
I do agree that they are once in a lifetime functions but then there are many such once in a lifetime functions. People should see it as a form of get together only and not the media to show their status. Status can be seen in day to day life itself, there is no need to show it off. And the most important thing is the inner satisfaction. If you are able to show off higher status but lack mutual understanding in the family, or there is a lack of family values then what is the use of the status then?
If people are only going to the high status people for the money then it is a sign that such people are not useful in the time of need. Such people can't be trusted. And trust me if you just skip such people and go ahead then you will find good people, though they are just handful, they will always be there for you.
I suggest to spend only a minimum amount of money on such functions depending on your financial condition.
Don't ever spend all your savings on it. Get the financial freedom before getting in to such expenses.
That's it for now.
Please share your views in the comments section.
See you soon.
Till then have a nice day..
Sumit
The POWER is when,
You use ODDS,
To get EVEN.
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