Over just two weeks, there has been an expenditure of around Rs 30,000 on my pet dog. Bulk of it was thanks to a one-time procedure, some routine spends on food and hygiene, but there were also roughly 25% unexpected medical costs. Last month we also had a hefty bill of close to Rs 1 lakh on our car, some of it, regular service cost and some unexpected repair costs for a critical component.
No matter how much we plan our spends, unexpected spends come up every few months. By unexpected spends I mean expenses that can’t be overlooked and must be made. Unplanned medical costs like investigative tests for family members are now a common feature every month or two in most households. Costs around school needs, repair work in the house or for the car, dire need of close relatives and so on are unpredictable expenses that all of us face at some point through the year. The nature of the expense keeps changing but they do pop up out of the blue every other month.
If these expenses become too large in any month, it will cause a dent to your cashflow for the month. As we said, you can’t prepare for this in advance. Instead, what you should focus on is reducing your non-essential spends in a way that you can accumulate enough to care to such emergencies. How can you spend less and save more?
Here are four things that might help you.
1. Plan the days you eat out or order in
It’s true that eating out in the pandemic has drastically reduced. However, ordering in a meal or even a feast has increased in frequency. Previously, eating out costs came bundled with service tax and service charge and now ordering in has its own taxes on the parcel and a delivery fee or a convenience fee. All this adds up. If you sit down to add up how much you spend on ordering in your food, it will surprise you. Order in 20% less than how often you do and save on this indulgence.
You can do this by simply planning better and reducing that one or two days in a month where you plan to order in.
2. Don’t rely on mobile apps for shopping
Its convenient to shop through mobile applications especially when it comes to the essentials, but it can become very wasteful and extravagant when you start using them for non-essential shopping. What you can do is, keep your Amazon and Big Basket like apps on the phone, but get rid of apparel, gadget and household goods shopping apps. A quick buy through these apps can be tempting but also it can set you back a few thousand rupees in an instant. You end up buying something you really don’t need or won’t use more than once, at the same time by spending that money, you end up short for unexpected essential spends later in the month or a few months later.
3. Be price aware
There is a craze for branded goods no matter if you are buying apparel or food. Be smart when making your brand choices. Just like certain apparel brands can charge ten times more for the same plain, white cotton t shirt, some food brands charge double for organic sourcing and eco-friendly packaging. While we all want to contribute the most for the environment and towards our health, you have to be aware of the price and understand whether you are paying more for the product or the brand or the packaging. If your entire grocery bill is for organic produce, then you have more than doubled it as compared to when the organic label was missing. Don’t mis understand the premise here. Let’s say you were growing tomatoes at home, would a chemical free, natural seed plant cost you more or less to maintain? Today there are five different organic brands of grains available in the market, all at different price points. Is one more organic than the other?
Choose your products wisely and don’t overpay just for the brand.
4. Cut out the credit
Whether it is through the credit card or through consumer loans, break the habit of buying what you consume on a daily basis on a loan. If you are not repaying your credit card bill in full and on time, it’s a loan. If you are buying your phone or the TV on EMIs or putting your online shopping bill on easy EMI, it’s a loan. A loan is never going to be free of cost for you, no matter what the terms. In the least an interest free loan will tempt you to go on purchasing without being able to afford the items and eventually the interest free period will end and costly repayments will begin. By cutting out this toxic habit, you can save yourself a lot of money and peace of mind too.
Saving through these simple means will let you live the same way you do, but will ensure that you don’t indulge in unnecessary expenses which can impede on your essential, but unexpected costs.