Although most of us can afford to splurge a bit and not worry much about some ‘small’ expenses, it’s still a good trait to always question oneself – “is this the best use of my money?” If and when an emergency strikes, the banks and credit cards will work for you..sure….but more in a predatory manner that’ll seek to maximize their profits at your expense. Many of your friends will excuse themselves – frogs and fishes vanish when the pond goes dry! Your family will question and lecture you but none will try to understand you.
Every time you need to spend, give it a little extra thought. See if you can find some means to make your dollar (or rupee) go a little further. Some of things that I could think about and have implemented them or in the process –
1) Washing Machine: Gather more stuff and lower the frequency of use. If you use it 4 times a week, try and see if you can manage with two runs in the same duration.
Additionally, try running in the “delicate” mode. Clothes get equally clean. They are less abused by the washing machine – you can visibly see that less lint needs to be cleared from the washing machine. You end up using half the power. All good.
For example, if you were using the machine twice a week running a total of two hours, a 2000W unit will cost you 16 units of electricity.
Keeping everything else the same, running the appliance in “delicate” mode will amount to ~8 electricity units.
Going a step further, using the “delicate” mode in addition to cutting down the usage by 50% will amount to ~4 electricity units.
2) Laundry and Ironing: Try and buy mostly clothes that do not necessarily require dry cleaning. Imagine spending Rs.50 on every shirt for dry cleaning purposes. That’s what Bandbox charges in B’lore. There are other cheaper local shops, but many times they’ll just regular wash it although they’ll charge you the dry-cleaning rates!
Ironing/Pressing of clothes: Typically, in most places we are charged Rs.5-8 per shirt. With even 10 clothes per week, that runs to Rs.280 per month, at least. This 280 would correspond to about 56 electricity units (upper limit).
Imagine now you are ironing your own clothes with well designed and reliable 1500W iron box. The entire month’s ironing would amount to ~ 3-5 electricity units at ~4 minutes per cloth ironing time. Moreover, if you got kids at home, you’ve imparted them some basic skills on self-reliance!
In electricity units, you have come down from ~56 to now about 5. In direct cash you have saved about Rs.255 per month – with just ironing!
In a similar vein, cut down on all the unnecessary electricity use that’ll only burn a hole in your pocket. Replace your incandescent with CFLs. Turn that TV off if no one’s watching. Turn off and unplug all the electrical and electronic appliances that aren’t necessary – laptops, cellphones, battery chargers – it helps not only save on electricity but also save the appliance during power outages. Spike busters will not always save your TV from that sudden power surge. Eventually it’ll take it all to the e-grave.
Set up fun games with your kids to join the party and set some targets to achieve in meaningful cut down on electricity usage – start with a 10% reduction and slowly increase.
3) Car Wash: Do you think your car wash guy is being gentle enough on the car? Imagine rubbing along some sand-paper on the body of your car – well that’s very close to running a cloth (however soft) on a dusty car! You car cleaner doesn’t give a damn, he’ll just run the cloth all along. And you pay Rs.300-600 per month. He won’t even use a car shampoo, neither will he use a soft brush or a microfiber. He’ll be using a never-washed-always-dirty-and-greasy looking cloth..dip that in a equally dirty and murky water bucket… slowly killing away your car.
Please take charge. Save that 300-600 per month. Get yourself a nice set of brush, microfiber cloth and spong, and possibly a shampoo that will last 2-3 years.
Your time investment will probably be about 10-15 minutes per day. Once a week some extra time and once every month about 45 minutes or so. It’s also a very good activity to involve your kids into. Show them the right way to maintain you personal belongings.
4) Domestic Help: This is a little dicey. I do know people who get along the days and weeks just fine without any need for a domestic help. But many times, it’s really very difficult in our Indian way of life where there is dust and dirt everywhere. If the rooms are not swept or mopped for a week, it becomes hellish to live in that place.
Even if you do have to get, try to hold on to the ones that actually do the work they are hired for, even if it means putting up with some other harmless idiosyncrasies.
5) Cut Down the Number of Bank Accounts: Unless you have gunny-bags filled and stash of black money to hide, you don’t need more than 2-3 bank accounts. Why waste your money in maintaining their minimum balance required when that money could be actively working for itself and multiplying? Why pay for those unnecessary debit card when you know you won’t really need to use them.
6) Restrict the Number of Credit Cards:You don’t need more than 1 or 2 cards. Why pay any annual fees and keep worrying about their terms & conditions that are liable to change any moment…to your disadvantage? With the cards you have, maximize the reasonable profits through their rewards program in a manner that’s not harmful to your personal finances. Resist the urge to go for those frivolous gadgets/articles/appliances/apparels/…that you can easily avail on a 0% EMI basis.
7) Bulk Purchases: Not all, but some things are better purchased in ‘bulk’. If you can buy 5 bars of soap at Rs.45 each compared to a single bar at Rs.55, go with the bulk. You’d be both penny wise and pound wise! Make a similar analysis for other things that have a long shelf life – dish washers, detergents, hand-wash and other toiletries….If it’s a liquid item, evaluate the price per milli-liter…if it’s solid evaluate it’s price per 100 gm or whatever makes sense….take some joy in giving those mathematical neurons some workout so they remain sharp!
If you make yourself adept at identifying the quality of the materials you need to purchase, you can safely divorce away from “brand value” and pay only for quality – not for brand.
8) Ditch the Periodicals: If you have some subscription to any journal or periodical that isn’t being used, cancel it right away. I had my national geographic subscription running for a few months before I realized no one at home’s reading it any more.
9) Apartment Rentals: Obviously you can’t buy an apartment every place you need to move, but you can certainly be a bit more selective on the place you rent. I realized I don’t use the pool or the fitness center or the game room. More the amenities the apartment complex offers, higher will be the maintenance charges. Do I really need to pay for that golf course maintenance that I never use?
Choose a place that is slightly away from the “Main Roads” and your rent for a similar apartment will be cheaper by about 25% or so. Negotiate on the annual hike in rent. The home owner will push for 10-12%….most of them are understanding enough and will bring it down to 5-7% – only if you negotiate properly.
10) Driving and Public Conveyance: Most times it may not be feasible to take public transportation. But in Bangalore, going to the airport has become so much more easier with the Volvo AC buses that taking a cab for that purpose is almost a financial sin!
For regular driving though, your needs permitting, prefer a hatchback over a SUV. Hold on to your reliable two-wheeler – they are much more fuel efficient and time efficient for many of the everyday tasks. Although it’s become so much easier to own a Ducati or a Harley Davidson (HD) or an Indian, the quite persuasion of a 100-125cc from the Honda/Yamaha/Hero will go a long way in coming to your aid when it matters most.
While on the subject, develop clean and disciplined driving habits so your engine has to do less work. Accelerate smoothly and change gears at right speeds and rpms. Burn less fuel for the same distance covered. In places like Bangalore, no matter what your peak speed (be it 180 kmph or 60 kmph), no matter what your acceleration, your average speed works to be the same – about 25-40 kmph! The himalayan-high speed breakers or the marina-trench like pot-holes or the sheer volume and density of traffic are the great equalizers that’ll ensure all you BHPs, CCs, NMs, PSs all converge to the same platform!
I see many Royal Enfield’ers abusing their vehicles trying to break away from signal stops accelerating like a high end performance centric sports bike! Treat a cruiser like a cruiser. If ego gets in the way of financial wisdom, that’s a red flag signalling ruination and expensive education ahead.
Clean your vehicles well so heat dissipation works fine and your engines don’t get over worked. Check your tire pressures at least fortnightly if not every week. Arrange and re-arrange all your errands so all work is accomplished in more or less one continuous heating of the engine instead of many heat-cold cycles. Turn the engine off when the stop is for anything more than about 30 seconds. Prefer the natural air over AC when the speed is less than 70 kmph but anything over it, the AC might be more economical than keeping the windows open (think about the air drag and resistance).
11) Meaningful Relationships: While you certainly must socialize, take some relationships more seriously. Have some in your circle that span different age groups, different backgrounds and different perspectives. There will be those that are very matured, they understand value, they understand wastage as well. They know when to say what, they also know when not say something. There will be those that are brutally honest and will give their opinions..even though it may not sound pleasing or agreeable to you. They are emotionally secure. They won’t act like immature brats or desperate kids trying to prove something. They won’t be a push-over neither will they try influence/control others. They are very aware of what’s happening around them. They are knowledgeable and updated. They have no time or inclination for showing-off or quarreling over petty issues. They know their rights and also very conversant with their responsibilities. They’ll not make any place – public or private – messy. You get the drift…
Develop meaningful relationships with such kinds. They are ones that’ll go the distance. Of course, you can’t develop any such relationship if you yourself are not like that…a bitter-sweet conundrum! This will help you evaluate everything in an objective impartial manner without getting judgmental.
12) Low Quality and Worn Belongings: If you are in India, make sure you have few cheap and low quality things as well so you won’t lose much if you lose them.
Initially I used to only have few belongings but I made sure they were top notch in quality. Once I had to take a friend to a diagnostic centre in B’lore. It was required to leave your footwear outside. On return after the work, I found my footwear was stolen! I was certainly annoyed but also learned an important lesson. From them I have one footwear for these unofficial works, few unofficial clothes and other personal belongings that even if stolen or damaged, I would not lose much.