Earn while you spend
Rising inflation has forced us to apply the brakes on the pace of our lives. In such a scenario, brinda Suri offers an alpha-zee list that tells us how to earn from our spending and feel good with some extra change in the pocket.
The year is crawling to a close and amongst the biggest dampener has been inflation. It’s chewed into budgets, put-off family holidays, reduced entertainment options, well, let’s just say, it’s made us reluctantly apply the brakes on the pace of life. Let cheer not fly out of your window. It’s time to outsmart inflation by adopting some smart methods to make your money give you more return.
Every rupee saved means being prudent with your finances. Here’s an alpha-zee list that doesn’t tell you not to spend, but how to earn from your spending and feel good with some extra change in the pocket. Add some more of your own to these jottings and bring back the smiles as you step into a new year.
Airline tickets: As a rule, book air tickets in advance. These will be about 25 per cent cheaper than the nth hour purchase. Flexi-rates may bag you a great deal a day or so before departure, but it’s sheer chance. It’s also wise to check the fare difference among ticketing websites and inquire about discount deals of the day before purchasing.††††
Bill drill: Don’t delay paying your bills. The late fee is an absolute unnecessary drain. Opt for online bill payment wherever possible. Many private players, some cellular operators for instance, offer a cashback if bills are cleared on time, online.
Credit card dos and don’ts: The credit card is not the devil it is made out to be by the old school of thought. The rule of the thumb is, credit without debt. This translates into using a credit card but never ever defaulting in clearing dues and letting them run on to the next billing cycle. This will hurt you in two ways — besides being slapped with a late fee, you will be charged an interest on the balance amount. Your loss is the credit card company’s gain. A credit card debt is known to have wrecked families. Disciplined spending and no overdues is the name of this game and its winners are those consumers who utilise it sensibly. Using a credit card gives you another bonus: via reward points it always pays you back a proportion of what you spend on every use.
Dine without whine: There’s stiff competition in the hospitality world and restaurants are all out to lure. Look out for happy hours, special prices menus and coupons in newspapers/inbox/post-box. Log on to sites like snapdeal.com which offer daily deals on restaurants. There’s a saving assured in your date with the plate!
Energy savers: What’s the aged refrigerator or that decade-old air-conditioner doing at home? It’s not enough to merely use CFL bulbs, you need to replace the old power guzzlers with energy-efficient appliances to bring down the electricity bills. Even the smallest of items will help in not only saving money, but also in gladly reducing your carbon footprints. For a start, here’s what you can switch to: rechargeable A4 batteries, eco toaster, running fridge/AC on power-saver mode, and investing in a rundown-timer-plug that switches off appliances.
Flying miles: You have already been advised to purchase air tickets in advance. Here’s an add-on. Don’t shy away from signing up for hotel loyalty cards, shopping cards, credit cards, airline offers, etc, and choose the option of converting reward points earned into flying miles. You can use these miles for gaining extra baggage allowance, upgrading your flying class, or better still, earning a discount on your ticket.
Guarantee and warranty: While purchasing an item, do check whether it’s a guarantee or a warranty. A guarantee is a promise made by a seller/manufacturer to a buyer about replacing an item or refunding the money if it doesn’t live up to its quality while warranty pertains to only repairing an article or replacing a defective part. Remember, a guarantee is always free for a fixed period and a guarantor cannot refuse to provide a copy of the guarantee. But it’s binding on you to get the card signed by the dealer or keep the bill or register online with the manufacturer. This will be required in case a defect arises and needs to be sorted. Else, you’ll be handed a hefty bill for service provided.
Hidden hotel fee: Hotels somehow always manage to squeeze in an unreasonable fee. Here are some pointers to keep in mind: 1) Think twice before opening that bottle of mineral water on your table. It’s a big grosser and could cost you upward of Rs 100, depending where you’re dining. 2) Check if you’ve been billed a service charge. If so, the tips have been taken care of as this covers a pay-supplement to bellboys/waiters/ housekeeping staff. 3) Read the hotel’s cancellation policy carefully before booking. You wouldn’t like your money forfeited. 4) Always allow yourself plenty of time to survey the final settlement charges and dispute any that seem unfair.
Invest right: Jump out of dead investments in mutual funds, shares or bonds. Sometimes we hold back when financial jargon like penalty, exit load, entry load is thrown at us.
Most times, it’s a meagre amount and it’s better to let that go than lose your principle (even if it’s slightly in minus). Invest it elsewhere. The old fashioned fixed deposit (FD) or monthly income scheme (MIS) offered at post-offices may be the tortoise in the race, but in times such as these, they are winners. Don’t let pride or embarrassment get in the way of questioning your investment manager about terms and conditions you can’t comprehend. You’re not supposed to already know it all. In fact, you’d be surprised how little most of us are aware about financial matters. Your endeavour should be to diversify your investments and let your money grow even while you sleep.
Junk the e-gadget: If you have got it, and do not need it, junk it! Besides being the easiest form of decluttering, you earn as well. Sell old mobile handsets, iPods, cameras, MP3 players and more on e-sites. (However, if you can’t manage that, do reduce carbon footprints and drop the defunct pieces in special bins provided by electronic companies at their retail outlets).
Know your rights: The customer is king, yes, provided he/she know their privilege as a consumer. The law says a consumer has the right to be protected against faulty goods and services, can seek redressal and be heard against unfair trade. So, don’t shy away from getting bills re-checked if in doubt; insist on having the LPG cylinder weighed on delivery; return a dish not up to standard at a restaurant; have fuel checked for purity at a petrol station. If your grievance is not heard, register a complaint with the local consumer court. Why pay for a flawed service or product?
Liabilities: As far as possible, always clear debts with savings. Those who try saving while in debt are simply diminishing their money power. The amount paid as interest on borrowing is far more than the earning on the savings. This advice may not make good business sense, but it’s significant if you don’t have an assured monthly income to pay off the debt. Use the savings and breathe easy.
Mobile libraries: The cover price of magazines and paperbacks are hitting the high notes. Don’t let that kill your pleasure of reading. Sign-up with mobile libraries in your city who deliver at your doorstep. For a small monthly subscription, you can get to read quite a variety.
Nirvana: Financial nirvana should not merely remain a dream. Turning it into reality isn’t as daunting as it seems. Follow some simple steps to achieve it: 1) Set your investment goal (child’s education and marriages are matters to be considered). 2) Do your homework (meet investment advisors, read newspapers, ask questions). 3) Invest in established funds/shares and don’t get swayed by projections. 4) Take the services of an investment manager, for, as a layperson, you know a certain bit and no more. 5) Don’t get attached to an investment. Always bear in mind to cut your losses and move on.
Online commerce: E-shopping has arrived in India. And it’s easy, exciting and efficient. There are more pros than cons, the benefits being: it saves on your fuel, saves on time, and the best part is, money transactions are secure. On the downside, you’re restricted in choice and delivery is not instant. The product price maybe slightly high, but should not be a deterrent, because if you see other costs involved as travel, etc., for your market trips, you’ll observe it works out about the same. You have started buying your railway/air tickets online, haven’t you, despite the slight extra service charge? You do it because it’s worth it. So will this be! Seek opinion of friends who have made purchases and try it a few times. You will get converted! Most sites offer discounts and deals which add to the fun of shopping at the click of a button. Some recommended sites for groceries, apparel, household goods and cinema tickets are: flipkart, jabong, zansaar, foodmandi, bookmyshow, yehbhi, myntra, etc.
Petrol cards: Opt for fuel-saver cards. A leading bank’s titanium credit card, in association with Indian Oil, lets you save five per cent on fuel purchase and allows redeeming reward points for free fuel. There is zero annual card fee for the first year, provided you spend a certain amount on fuel annually. Bharat Petroleum’s Petro Card is another player in the field. Before opting for any card, clear all doubts because there’s always a fine print we tend to miss in the mumble-jumble of a sales spiel.
Quality over quantity: The market is full of temptations. Consumer items are available at throwaway prices. It’s prudent, though, to invest in one quality product rather than going in for quantity because it’s cheap. One branded shirt is a better deal than the offer of three ordinary shirts of the same price which may lose shape and colour before the season ends. Penny wise, pound foolish is a long established idiom, isn’t it?
Recycle: We don’t need the West to teach us recycling. The friendly kabariwala has always been around to aid us precisely in that and also pay us for all the unwanted rubbish. So, don’t throw what you can sell. Old newspapers, bottles, tins, metal scrap, glass, etc., all lets you earn. Used school/college text books and old novels will sell well at second-hand bookstores.
Shopping list: This sounds old fashioned, but it works very well. Before you go shopping, whether it is for vegetables or household needs, make a list of what you require and stick to it. This not only prevents you from buying items you don’t need, but also saves on the fuel bill by cutting down extra trips to the market.
Travel off-season: A great vacation does not always mean peak time travel. The off-season brings in its bag of fun. Besides scoring exciting discount deals on tickets and hotels, you also discover a new facet of a holiday spot when the herds are away. Research extensively to get the best bargain. Browse trusted travel websites for irresistible offers, look at coupons in magazines or newspapers, and don’t dismiss that pesky sms offering you a holiday plan. All these can translate into trips worth cherishing.
Unnecessary expenses: Again, it may sound old-fashioned, but don’t waste where you can conserve. Some malls and shops now charge for a carry bag, so you have fallen into the habit of always packing in a few. Similarly, why buy drinking water? Instead, carry a bottle along when you travel. Eating out daily at the office canteen or pizza joint is not the healthiest of options, so invest in a tiffin carrier and tempt colleagues with homemade preparations.
Valuables in vault: Safe-keep your valuables in a bank vault or buy a home-use locker. You wouldn’t want an unpleasant incident robbing you of your jewels and important documents.
Wheel squeeze: With escalating fuel price, it’s prudent to arrange a car pool for going to work or dropping kids to school. This way, you do get to flaunt your snazzy set of wheels when it’s your turn to be in the driver’s seat, yet, you do your bit in not adding to traffic chaos, and of course, conserving fuel.††
XAU and XAG: These are ISO symbols for gold and silver, respectively. With bullion rates spiralling, it’s wise to invest in a little whenever you have some spare cash. You can be assured of it never being a dead investment!
YAWN formula: Young and Wealthy but Normal (YAWN) is an emerging class of prosperous individuals who have raked in the moolah yet follow what moral science lessons taught years back: modest living, high thinking and sharing with society. With consumerism having flooded our spaces, it’s not easy to live life YAWN size. To qualify as a YAWN, you have to make the endeavour of not living expensive, but living consciously. In other words, multiply wealth to an extent which allows you to spend time with family, spare time for the environment, and use time to refine skills.
Zzzzzz: The best prescription for a happy, healthy lifestyle is a good night’s sleep! And that’s possible when your finances are in order and money walks an extra mile. Spend, save, siesta is the mantra.