Sometimes you just can’t seem to put your finger on why you aren’t able to save. Find out how certain daily habits lead you down the slippery slope to frivolous spending.
Sainesh Mathew is in this late twenties, he works at an MNC and lives in a metropolitan city. While he draws a significantly large salary every month he realises that he isn’t saving as much as he’d like to.
Moreover, when he decided to give this some serious thought he also realised that he wasn’t really living a luxurious life per se. But where was all his money going? What Sainesh did next opened his eyes to some of his daily habits that led him to spend frivolously.
Additional Reading: 5 Bad Money Habits You Must Give Up
Your lack of saving doesn’t necessarily mean you’re spending heavily on big-ticket expenses. Let’s face it! We don’t buy mobile phones every day or every month. Nor do we go on vacations every month right? So where does all that money go?
We often underestimate the amount of money we spend on our lifestyle on a day-to-day basis. And these may be really small things that you consider insignificant, but since they’ve become a habit you’re bound to do them every day.
Let’s take a look at some common daily habits that tend to eat away at one’s hard-earned income:
If you’re someone who is very particular about your daily dose of caffeine and where you buy it from, you may not realise every time you swipe your Credit Card to pay for it. Most coffee shops that sell these hot beverages often charge ridiculous amounts of money per cup (if you really think about it).
For example, if you’re a Starbucks fan, you’d easily spend anything between Rs. 180 to Rs. 220 on your coffee depending on how you prefer it. And if you’re a regular at Costa Coffee or Café Coffee day, then you’d probably end up shelling out around Rs. 140 to Rs. 170.
Now let’s assume you are an addict and need two cups a day. And let’s assume you’re spending Rs. 300 a day for your coffee. That means you’re spending around Rs. 9,000 on a monthly basis on coffee alone!
BB Tip: Honestly, brewing your own coffee and carrying a flask is your best bet in this case. But do check out these Credit Cards that offer maximum reward points on shopping for groceries.
We all know that travelling within a city can be quite difficult. The traffic, the rush, and the connectivity often make you dread the whole experience. And you can’t always rely on buses and autos, so the next best thing is to take a cab to commute. With Uber and Ola all over the place, you tend to rely on them heavily.
Let’s say you take a cab to work on a daily basis and you live within 10 km of your workplace. So your fare comes to around Rs. 140 one way. But then, sometimes depending on peak hours, transport companies often charge a surcharge and the same ride can cost you up to Rs. 180 one way.
So, let’s take the average fare here (Rs. 160) and do the math. On a daily basis you’ll probably spend Rs. 320. And if you work 5 days a week, then it adds up to Rs. 1,600 per week and Rs. 6,400 monthly. This is without taking into consideration your weekend travel.
BB Tip: You know you could very well pay Car Loan EMIs with that money. Think about it!
Additional Reading: Renting A Cab Vs Buying A Car
If you’re already relying on coffee from a coffee shop and using a cab to commute then you’re most likely also someone who eats out regularly too. Most single people who live in big cities are either too tired or too lazy to cook on a daily basis. Although we’re not here to judge you, we’d like to show you some numbers.
Let’s say you eat two out of your three meals at restaurants or similar food outlets. You are likely to spend around Rs. 150 – Rs. 200 on each meal (depending on the cuisine and the veg/non-veg preference).
This means you’re spending about Rs. 175 on each meal on average. And mind you this isn’t calculating your snacks and your weekend binges. So, two meals a day of Rs. 175 adds up to Rs. 350 per day. Which means you’re blowing Rs. 10,500 on food alone every month.
BB Tip: However, if you’re one to eat out daily you might as well consider getting a Credit Card that gives you reward points or discounts on dining.
Additional Reading: Credit Cards For Couch Potatoes
We get it! You live in the most happening city that harbours the finest pubs and microbreweries. So, you end up spending most of your weekends visiting these places. Drinks at a pub are pricey and if you don’t stop at two drinks, you’re surely going to end up paying a lot for a hangover.
Whatever your poison is, most alcoholic beverages are priced between Rs. 250 – Rs. 300. Now, we’ll let you do the math depending on your capacity and your intake. Plus, you will also be paying for starters and snacks that are exorbitantly priced at most pubs.
So dinner and drinks for two (assuming you have a partner) at a pub can cost you anywhere between Rs. 2,500 – Rs. 3,500 over a weekend. On an average that will work up to Rs. 12,000 a month and a whopping Rs. 1, 44,000 in a year!
Additional Reading: Budgeting Tips For The First-Time Financially Independent Soul
Yes, yes, we know it’s convenient to shop online given your busy schedule. Moreover, it’s also cheaper because of the crazy discounts you find online compared to what the stores offer you.
But, take a moment and think about whether or not you actually need the things you are randomly buying because it’s on ‘sale’. Well, you could have found an item that was earlier priced at Rs. 2,000 for Rs. 999 only. But, hey, just because it is now priced at Rs. 999 doesn’t mean that you have saved Rs. 1,001. The fact that you feel compelled to buy it means that you are spending Rs. 999 on something you never needed in the first place.
Or perhaps you see a window that reads “people who bought this, also bought this” and the constant adverts that pop on your Facebook page may not really be helping you, so you simply click away.
Additional Reading: Are You Guilty Of These 7 Online Shopping Mistakes?
BB Tip: Getting a shopping Credit Card will let you earn higher reward points and other benefits. Also, co-branded Credit Cards usually offer maximum discounts on brands that they are partnered with. Choose wisely.
At a first glance ,these daily habits may not seem like you’re being extravagant with your spending, and the amount you spend on these things may look nominal. But in the long run, these very habits will secretly empty your pockets.
They say that it’s tough to earn money and very easy to blow it all away, and if you don’t curb your spending habits you could either get into debt, or worse, not be able to plan or save for your retirement. Financial planning is absolutely crucial and at BankBazaar we have a bunch of options for you to choose from. If you’re looking to invest then you’ve come to the right place!