Identifying your spending habits can help you save better. Take this quiz to see if you need to curb your expenses or loosen the purse-strings.
1. When it comes to shopping,
A. I need no excuse; it's my favourite sport.
B. I always look for sales or promotional offers.
C. I only shop when I need something.
D. I dislike it, so I usually talk myself out of it.
2. When I receive my paycheque, I
A. Hit the malls and ignore the piled-up bills.
B. Pay only overdue bills and spend the rest.
C. Carefully balance fun and savings.
D. Feel guilty if I spend it on myself.
3. When I get an increment, I
A. Go on a shopping spree.
B. Promise myself, yet again, that I'll budget.
C. Treat myself and allocate the rest to savings.
D. Put it all in savings.
4. My spending style is such that
A. I don't know where all my money goes.
B. I have a good idea of the money in hand, but never let it come in the way of a good spend.
C. Most of my money is allocated beforehand.
D. I keep track of my deposits and investments.
5. According to me, credit cards
A. Get me all I want even if I can't afford it.
B. Help me pick what's worth buying or investing when I don't have enough cash.
C. Should only be used if there's no swiping fee.
D. Are useless, so I prefer debit cards and cash.
6. When I go on a vacation, I like to
A. Pamper myself.
B. Combine pleasure with business.
C. Do it cheaply without missing on fun.
D. Keep the cost low, never mind the quality.
7. When I go out for dinner with friends,
A. I usually fight for the cheque.
B. We pay by turns.
C. I insist that we split the bill evenly.
D. I ask for a separate cheque and don't leave a tip if service charge is included in the bill.
8. Of my total income, I try to save
A. Nothing.
B. 2 to 3%.
C. 5 to 10%.
D. 15% or more.
9. If I am in a tough financial situation
A. I prefer to borrow and maintain my lifestyle.
B. I cut down on investments and expenses.
C. I prefer to cut my discretionary expenses.
D. I stop borrowing and start saving more.
How did you score?
For every A give yourself 4 points, 3 points for Bs; 2 for Cs and 1 point for each D.
Understanding spending patterns is the key to money management. If you fall in extreme categories, reckless or penny pincher, shift to prudence. Spendthrifts, you can do better.
30-36: Reckless Spender, 24-29: Spendthrift, 16-23: Prudent Spender, 9-15: Penny Pincher
TRIM YOUR EXPENSES
Slashing your vacation budget or shopping bill is not the only way to reduce your monthly outgo. Here are some other areas that you can target.
Banking
Avoid hidden fees: Banks may charge an inactivity fee for non-usage of credit card.
Around Rs 400-750 a year, depending on the type of card you own—platinum, gold, silver or co-branded.
Refinance high-interest debt: Monthly loan payments take up the lion's share of most household budgets, so refinancing can generate substantial savings.
Up to Rs 5,000 per month, if the applicable interest rate is lowered by just 2%.
Investing Cost
Go online: If you choose not to use the services of an agent, you can save from 2% to 6% of the invested amount.
Keep tabs on your trading: If you aren't an active trader, make sure you're not penalised by a broker who charges an ‘inactivity fee'.
Car insurance: Insurance costs are going down steeply, so shop for the best deal.
At least Rs 2,500 a year, assuming that you invest Rs 50,000 and have car insurance.
Food Bill
Go Veg: Meat is among the most expensive items in your grocery bill. So consider cutting out a couple of meat dishes a week in favour of seasonal vegetables.
Rs 70-200 a meal, if 1 kg of chicken/meat is replaced by 1/2 kg each of capsicum, potato, brinjal and onion.
Utility Payments
Pay online: Visa Bill Pay offers a discount on all utility payments made through Visa debit cards. Look out for similar incentives offered by other payment gateways.
Rs 5 for every Rs 100 paid, but the discount is capped at Rs 50 per transaction.
Commuting
Car pooling or public transport: The average commute is 15 km a day in metros. By cutting your driving time by one day per week, you'll drive 780 km less in a year.
At least Rs 30,000 per year, assuming that the cost of fuel is Rs 40 per litre.
Medical Bill
Try downgrading: You could consider switching from newer patented drugs to generics or other low-cost brands.
At least Rs 1,500 a year. But don't try this without consulting your doctor or specialist.
DIY GUIDE
Here are some sites that can help stretch your shopping budget.
www.naaptol.com
This is one of India's leading comparison-based shopping portals. It sources prices from a growing base of suppliers, saving you the time and effort on research. For instance, the HP Pavilion DV5-1106AX laptop has quotes from 10 dealers across India, with prices ranging from Rs 43,900 to Rs 48,250.
www.investmentyogi.com
If budgeting gives you nightmares, try the online budget tool on this site. By breaking up your income and expenses into an exhaustive list of subheads, it not only ensures that you don't forget to add any expense, but also highlights areas where you can trim your shopping bill.
www.saleraja.com
This is an online database of all the sales, discounts and offers in town. So the next time you want to go shopping for the best deal with the least bucks, you don't have to scramble for the previous Sunday's newspapers. Unfortunately, the site's reach is currently limited to Bengaluru and Delhi.
