To save money in India is especially easy given the vast options we have in almost every domain. We at Groww, encourage everybody to save and invest more.
The most common grouse we hear from people is that they don’t have enough to invest. You can invest in mutual funds with an amount as small as ₹500 a month. But, if you make small adjustments to your lifestyle, you can save a lot more than just ₹500 a month.
Most of us don’t realize that we overpay very frequently. Without making any major compromises, you can easily avoid overpaying. Here are some of the ways:
In this article
- 1. Cost of Internet and Mobile
- 2. Electricity Bill
- 3. DTH or TV Cable Bill
- 4. LPG Bill
- 5. Commuting
- 6. Shopping Lists
- 7. Offers
- 8. Online Shopping
- 9. How to Save Tax?
- 10. Buying Things You Don’t Need
- 11. Negotiation and Bargaining
- 12. Be a Home Chef
- 13. Invest Your Money
- 14. Subscriptions
- 15. Repair vs Replace
- 16. Off-Season Shopping
- 17. Rent
- 18. Quality vs Quantity
- 19. Save/Invest Before Spending
- 20. Empty Your Shelves!
- 21. Expensive Gifts
- 22. Use Second-Hand Products
- 23. Stay Insured
1. Cost of Internet and Mobile
By simply changing your usage pattern, you can save a lot of money.
Switch to a prepaid connection. Often, people take postpaid connections to avoid the hassle of topping up their balance. This very frequently leads to overuse.
Use internet calling and messaging apps (Whatsapp, Line, Viber, etc) when possible. Data calls are usually much cheaper than regular calls. Likewise, SMS is much more expensive when we compare them to data messages.
Use wifi wherever available. Cellular data is far more expensive than broadband.
2. Electricity Bill
Try looking around your house. There might be many places you are wasting energy.
Do you leave your phone charger in the socket after you’re done charging? That is still using electricity.
Don’t leave your water heater on throughout the day. Switch it on a few minutes before you bathe every day.
Switch off the lights and fans when there is nobody in the room.
These tips might sound repetitive but they’re commonly overlooked. Look around the house, there might be several places you might be spending electricity needlessly.
3. DTH or TV Cable Bill
If you’re working, chances are you don’t get much time to watch TV.
DTH service providers often sell channels in packs bundled with similar channels. Chances of you watching all the channels in a given pack is very low.
It might be prudent for you to simply subscribe to individual channels from the a la carte service instead of taking the entire pack.
Same with news channels. Most new channels offer live video streaming on their website. Use those websites and various other apps to keep abreast of the news from the world.
4. LPG Bill
LPG isn’t the most cost-effective method of cooking food. Try switching to induction stoves.
Except for a few recipes that require a direct flame, most recipes can be cooked on induction stoves. Induction stoves use very little electricity – even less than water heaters.
The cost of cooking one meal on an LPG stove is much higher when compared to the cost of cooking a meal on an induction stove.
Traveling to and back from work makes up a significant portion of the expense for most working people.
Consider using public transport wherever necessary. If using public transport is inconvenient, try using a pooled car. Using a pooled car easily saves around 75% of the cost of the commute if the car is used by four people as opposed to one.
Services like Ola Share and Uber Pool helps you to save a significant amount of money and travel luxuriously.
For local trips to the grocery store and market, walk instead of taking your vehicle. Not only will you save more, but also stay healthy.
6. Shopping Lists
Use shopping lists and make sure you only buy what is on the list.
Supermarkets are designed to tempt you into buying more. There are entire teams whose sole task is to ensure people buy more than what they had intended to.
To ensure you don’t overspend, make a list of things you need before you leave for the supermarket. Buy only what is on the list.
‘Buy two and get one free’. Such deals may or may not benefit you.
Avoid falling for these tactics. Whenever you come across these, evaluate if it actually benefits you. There isn’t much point in buying three pairs of jeans all of which look the same.
On the other hand, if it’s something that gets used and is finished regularly, for example, soap, the deal might make sense.
8. Online Shopping
The Indian online shopping industry provides discounts and offers. Buying online can help you save a horde of money.
Online prices in India have been very competitive, in the past few years. Look for coupons and discount vouchers before purchasing anything. There are various sites that offer coupons that will help you save money.
Not only coupons, you can also avail cashback offers that give you credit in your account. You can use this credit to buy more things from the same website.
Another trick that many say helps people save money in India is to put your desired purchase item in the cart or wishlist and not complete the purchase. The website will notice this and try to offer you more discounts to ensure you complete the purchase.
Besides these, you can make use of online payment wallets (Paytm, Mobikwik, Freecharge, etc.) to make payments for buying offline goods too. These wallets often have cashback offers which help you save more money.
9. How to Save Tax?
There are several ways to save tax. Explore all your options and speak to a tax expert to lower your tax burden.
You might be paying more tax than you are liable for. The Government itself comes out with various policies that encourage investment in certain places in lieu of tax reduction.
Investing in Provident funds, insurance, term deposits and many others help you reduce the amount of tax you owe.
Investing in certain types of mutual funds called ELSS mutual funds also reduce the amount on which tax is calculated. ELSS mutual funds are considered a very good tool to reduce income tax and save money in India.
10. Buying Things You Don’t Need
We often buy what we fancy without much of a thought. Many times, such purchases only gather dust without being used.
While walking in a shopping mall, do you often feel tempted to buy something you see in the shop windows? A very fancy looking paper shredder? A new TV that promises sharper images?
Hold that thought. A good rule of thumb is to wait for 30 days before making a big purchase. Chances are, in those 30 days, you’ll realize you don’t need the item after all.
If you still feel like buying after 30 days of waiting, you’re probably justified in making the purchase.
11. Negotiation and Bargaining
Everything you purchase is a business deal. Business deals can be negotiated.
Just because a shopping mall has air conditioning and fancy lighting doesn’t mean you can’t ask for a discount. You almost always ask for a discount at the local vegetable vendor, don’t you?
At any shopping outlet, before the billing is over, there is no harm in asking for an additional discount.
While eating out, look at the bill carefully. Restaurants often add an additional service charge. This is optional and can be negotiated. You can completely avoid paying it as well.
12. Be a Home Chef
Eating out is expensive. Limit the number of times you eat out.
Cook your lunch at home and take it to work instead of buying at the canteen. Not only will this save you money, it will also ensure you follow a healthy and hygienic diet.
If you really crave eating outside food, try ordering food to your house instead of going to a restaurant. Food served at restaurants are usually more expensive. Besides, the setup, menu, dishes, etc at a restaurant are all designed to encourage you to order more than you need.
13. Invest Your Money
There is no point in having too much money lying around in your savings account.
The chances of you needing all your money instantly is very low. You could keep a small amount in the savings account and park the rest safely in liquid funds.
It makes sense to use your money to generate more money. Funds can be converted from liquid funds to money in your savings account very quickly.
Get rid of subscriptions you do not need.
Did you subscribe to a car magazine before buying a car? Maybe you thought it would help you choose the best car for your budget. But have you stopped subscribing to it after the car came in?
You might think someday you’ll take some time out to make use of your subscriptions. Truth is, if you’ve not made use of it yet, it isn’t high enough on your priority list to keep pursuing.
15. Repair vs Replace
Don’t replace what can be maintained.
Do you really need the absolutely latest phone? Can’t your car ferry you for a few more years? The washing machine that stopped working, do you need to replace it immediately?
The answer most of the times is no. Most things can last much longer than you use them for. Try to maintain, service, and repair as much as you can. You’ll be surprised just how much you can save every year by simply extracting more use out of everyday products.
16. Off-Season Shopping
Avoid buying when everybody else is buying. Things are cheapest when there isn’t much demand for them.
If you absolutely need something, then you have to buy it. But try holding purchases for times when they aren’t popular. Air conditioners are very cheap during winters. Same goes for woolen clothes in summer.
Sometimes, people buy cars during Diwali or Clothes during Christmas, which isn’t the ideal time. Analyze the market. If you wait for an extra month, you will notice that stores usually come up with huge sales in the month of January
This is probably the highest of all your spending every month.
A good roof to live under is an absolute necessity. However, there are various factors to look out for when choosing a house.
Avoid choosing a house bigger than your requirement. If you don’t have kids, you probably don’t need a 3BHK. A1 BHK might suffice.
The location is important too. If the cost of living close to your office is too high, consider moving to a cheaper area. At the same time, if you are spending too much time traveling or if the cost of commuting is too high, you should consider staying closer to your workspace.
Hence, you must take decisions keeping in mind how economical they are.
18. Quality vs Quantity
Not always, but often, choosing the cheaper item might prove to be expensive in the long run.
Some items are better bought cheap. At the same time, there are other items that are more expensive initially but prove to save money in the long run.
A slightly expensive but better-built microwave oven might last much longer than a cheaper microwave oven that might need replacing too soon.
Choose between high-quality and inexpensive products wisely. It doesn’t make sense to buy the highest quality of everything or the cheapest of everything. There must be a balance between both
19. Save/Invest Before Spending
It’ll always seem like you don’t have enough to invest.
When you earned less than you did today, you often felt you didn’t have enough. Now that you earn more, you still feel the same.
In the future, when you earn even more, you’ll most likely continue feeling just as broke. Our spending adjusts to our earning.
This is exactly why you should save and invest before spending. Set aside a fixed amount for saving and religiously save that much every month. A SIP might solve this problem as the amount is automatically deducted from your income.
20. Empty Your Shelves!
Sell whatever you don’t need.
Did you buy a tennis racquet thinking you’d learn how to play tennis and later got bored of it? If you don’t use it anymore, sell it. There is no need to hold on to what you have no use for anymore.
On a weekend, spend time exploring all the things kept in your house. Chances are, there are many things you don’t have any use for. Selling them will allow you to have money for things you might need more.
So, instead of spending more money on something you need, you can simply extract money from things you don’t need.
21. Expensive Gifts
You don’t need to buy expensive gifts for others just to keep up your standing in society.
An average Indian spends about 5% of their salary every year on gifts. In a country where festivals and social gatherings are common, it is expected that you probably do spend a decent amount of your salary on presents.
Yes, we understand that you want to gift your friend something nice on her birthday, but do you really want to go out of your financial means to buy that gift?
Instead, stifling a little effort to make her something or buying her a necessary household product instead of buying a luxury item, or making use of the transactional offers given by stores (buy one get one free) and so on will turn out to be economical for you and fulfill your agenda as well.
22. Use Second-Hand Products
Buying second-hand products could turn out to be the best possible deal for you.
Yes, we get that a brand new product has a different charm and it is probably not a good idea to buy second-hand electronic devices like a mobile phone or even a laptop. But most second-hand products can be purchased for half the price.
For example, books. If you are an avid reader, you can buy good quality second-hand books online, for less than half the price. Similarly, there are so many retail as well as online outlets which let you buy and sell second-hand products, like Olx, All India Bazaar and Flipkart.
23. Stay Insured
Precaution is always better than cure
We live in an uncertain world. Nobody can guarantee you a ticket to an IPL match, let alone life. It is important to be insured at all times to avoid any type of unpredictability.
Life and medical insurance help individuals in the time of disparities and there are various schemes one may choose.
Now, you might be thinking about why you should pay a yearly premium when you’re hale and hearty. What if tomorrow you meet with an accident and are admitted in the hospital? Any good medical facility would charge you a sum which is off the roof.
But if you are fully insured, you will not have to pay for the medical bill to a large extent.
The sooner you start saving, the sooner you can start investing. It might not seem like much to invest some time later.
Over a long period of time, this can have a magnifying effect on your returns. Invest as early as possible.
Disclaimer: the views expressed here are of the author and do not reflect those of Groww.