Time to Save!!

I started my career as a  salaried full-time employee two years ago. When I looked down how much I have saved, I must admit that I have not saved a single rupee. My salary is sufficient to run a family of two pretty comfortably. We are not into any sort of financial crux so far but I nonplused about where the money went and how I did not care to keep track of the expenditure.

Deciding to save some money, the first step I took was to analyze my expenditure. The basic problem was that I did not plan my spending. Plan my spending? What does that mean? I did not have any list of the things that I need to get before visiting a mall. I used to browse through and if I like something I used to buy it: most of the time only unnecessary things. Now, I have decided to make a list before hitting a shopping mall.

Most of the times, I observed, the money spent on petty things is accumulating more than the few costlier things. If you track your expenditure for a month on a daily basis, this can instantly be identified. For example, autofare to the shopping malls for a month, accumulated to a higher value than that of the actual purchases I did in that month. Getting a bike would be a better option for the long term.

One major thing that I fell for was the credit card. I knew and have heard people say that holding a credit card is not a good idea. I thought I could control my cravings for buying things and that credit cards would not take much of my money. But I was wrong. I was infact lead into buying more things than before, as I have the facility to pay later. Warren Buffet, the richest man in the world, advises youngsters not to use the plastic (credit card). You are spending a money that you are going to earn tomorrow. The debt level increases. The most cunning strategy adopted by the Credit card company is the “minimum payment due”. As long as you keep on paying only the minimum payment due, the credit card compay is earning more.  To lure you to pay only the minimum amount, often the minimum payment due is of very less percentage of the actual due. You would pay the minimum amount and be happy that they you are not late but it draws more interest in the long term.   I have decided the following things about credit cards
1) Not to use credit cards to shop something big which I cannot afford to and later pay more money that the actual cost of that article
2) Use CC to pay my mobile bills where in i would get cash-back offer
3) Use CC to book railway tickets where in I would get cash-back offer
4) Clear the CC debt in full. Avoid paying only the mininum payment due.
Full stop. I am not going to extend its usage more than the above points.

I am crazy about tshrts and I have more tshrts than I need. And of course, all of these are branded. Sitting down and thinking about it, I found that I have spent few thousand bucks for apparels every month. And it was not necessary at all. Instead, I could have maintained what I have better and it would have added up few thousand rupees to my savings. I have planned to pay attention to what I have already and to deny buying new ones unless it is necessary. Again, it should get into the shopping list If i need one.

Now that I have understood my expenses a little bit, I am going to focus on why I did not save any money when I could have saved a considerable amount by now? Upon scrutiny, I found that the most important factor is the attitude “I would do later”. Every month, I was postponing the savings saying “not this time. Probably from next month”. Why? Well, I got to pay my bills first. This is a big mistake. You should set some money for yourselves before paying money. Had i saved, 1000 rs per month for the last two years, by now I would have 24,000 rs plus the interest. This might look like an insane point but setting aside money for yourselves as the first job every month will work wonders. You can also make use of autopay options to transfer the money automatically to a savings account or some investment.

Ah!! That’s it for now. Let me try implementing these for couple of months and see how well it helps me in saving. Comments or suggestions are welcome.