I am very good at design/creativity, presentation of things (from food to jewelry), talking and mathematics, and will take full credit where possible. Don't fret, I am not tooting my horn here, I am just trying to make a point. So, while I am good and experienced at all these things, I am not so at personal finance. I am just a beginner in this field, and the wish to talk money management with you is a personal desire, not meant to force you into following a certain way. The knoweledge I have acquired so far (thanks majorly to my financially smart hubs, Kartik) is valuable and I just want to use this forum to exchange some ideas with you. That's my sole purpose here, and nothing more. Oh, and if you end up finding them useful -- cool brownie points for me, right? :)
Now, that we have established the key points, let's talk money. Ready?
The way I see money management is tri-dimensional. You have a) saving tips b)personal finance c) no-lottery gimmick
a) Saving Tips aka Saving yourself future one bag of chips at a time: This concept spans your everyday existence. I remember when I was in college (full time), I used to work (full time) at a place where the boss was just impossible, but the pay was good. So, I worked and I spent. I had to buy a piece of clothing every week, and may favorite store, H&M. I just went crazy every Friday (thats when I got my paycheck) and spent around $50-$100. We are talking roughly $400 every month!! I also had breakfast and lunch outside (sometimes dinner to fancy-schmancy places), so that's additional $200-$400 per month. When I deposited money, I noticed that while my take home pay was resonable, the amount adding up in the bank account was not. That concerned me and so, I stopped the impulsive buying of clothes/accessories, and controlled myself from passing by stores that screamed for me to get in. It was hard people, and we are really talking about a mammoth sized self control here. And, then I saw the effects of such a control in my bank account statements... I was a happy camper. Then this happened.
As soon as I collected a sizeable amount, I started spending again. And, it kinda' brought me back to where I began with - somewhat. One day, while I was waiting for my class to begin, I picked up a newsletter lying around, apply titled 'Dollar and Sense' and was hooked. It talked about kids who had made smart spending/saving decisions and had ended up opening their own ventures or had been able to go to grad school on no debt. Inspirtation, hello!!! I decided immediately I had to do something smart - financially, and the next day opened myself a Money Market account. I will talk more on this in the next topic, but, had to say, that was one of the smartest money moves I made, while in college.
So, knowing that we (yes, including me) sometimes gets caught in the impulsive buying of that one lil' cup of latte (hey, need that for staying awake), or that lil' t-shirt (gotta look hot at the party) or that zillion pack of gum (does my mouth smell), we need to bring our focus on these very spending habits and take a good look at it. I am going to lay down some simple pointers on how we can make a positive dent on our everyday lives and chores, and trust me, this will add up towards a brighter future:
- Make sure to prepare a list and carry it before you head out to WholeFoods or Stop & Shop. While its ok to try on something that catches your eye, sticking to your list will keep you focused. Also, keep the company discount card in your car keys or wallet always as you could end up saving upto 50% easily on quite a few items
- Carry a bottle of water and some candy with you always - you can buy them in bulk from Walmart or Costco. This way, when you are on the go, you will not feel tempted to grab a bag of chips or cookies or soda (average cost $3.50 per item), as they are jacked up quite a bit at the delis
- I have mentioned this in my prior post, the joy and benefit of shopping online can be sweeter if you have coupons to apply. Before hitting that 'checkout and pay' button in a frenzy, just give Retailmenot a try. Type in the vendor name and you are bound to get some useful coupons which can save you from $10 to 20% on your order
- Did you know that when you wash clothes, the highest cost is associated with heating up the water and, not with running the machine. A great tip is to always use cold water for your rinse cycle. Warm/hot water has little effect in this cycle and is a total waste
- Another pointer to help you with keeping the sanity of your office clothes - if possible, hang shirts on a hanger and air dry them. They will remain stiff and almost crease proof. With pants, air dry them too.
- Before you start going crazy with holiday shopping during holidays, a good way is to start making the list now. The biggest sale on item is when there is no sale at all. Yes, you read it right. Avoid those one-day mega sales or super Saturday bumper blowout, for those events are spending marathons. These sales need to cover the cost of advertising and extra staff present - and where do you think they get the mileage from? Instead, the sale section during non-sale periods provide you with items with the biggest discount. And, hey, don't forget to get working/buying on your holiday list now
- If you own a house and have been paying PMI for sometime, there is a way to saving that $400 (approx.) a month charge. Write to your mortgage company if a) you have made payments on time for atleast 2 years b) have experience equity appreciation on your house c) have atleast 20% equity in your loan d) have made substantial improvements in your house that has caused appreciation - and ask them to adjust the loan to value ration. In most cases, due to the reasons listed above, the PMI will be dropped, and then you can also take a refund from your escrow account... Ma, if you reading this, please take action immediately!
- Talking about home brings me to garage/yard sale. Take out few hours on a weekend and just sell those things that you don't need. Trust me, someone will find your 'handy veggie cutter' useful. So, enrich other's lives and your pocket at the same time. Remember, Shikha had a yard sale few weeks ago...I even blogged about it
- If you are a phone junkie (unlike me) and are perennially tied to the handset, then call your cell phone company and ask them to move you to a better rate in line with your calling habits. You will surely come out a saver with this little phone call
- Go to your local pharmacy store, like CVS, Walgreens, Rite Aid for your stationery supplies - definitely a lot cheaper than office supplies store
- Make a habit to save a dollar a day, and actually stow the bill in an envelope or a secret place. Then, at the end of each month, deposit it in your savings account. This also helps you to create a 'Travel Fund' without dipping into your other working accounts
- Can't say enough, unplug all electric devices at home and save 10-15% on your electricity bill
- If you work in a multi-national firm, you are sure to have a discounted market place. If you don't know about it, please ask your HR department. These discounted market places offer good savings from magazines to airfare. So, please find out more. Oh, and because these big companies donate to the Trust/Endowment funds of most museums and theaters, you also get free entry to them as well. For example, I get free entry to the MET, National Museum of Natural History, Bronx Zoo, etc
These are just some ways to enable you to become a wiser and a thoughtful spender (notice, I didn't say saver). It takes a lil' conscious effort on your part, and then its a smooth ride. Any other tips you would like to share? Do let me know.
In the next part, I will be opining on personal finance and how I have made some of these decisions.
Happy Friday -- and savings!!