Sainesh Mathew is in his 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 gave this a serious thought he also realised that he wasn’t exactly living a particularly luxurious lifestyle. So, where was all his money going? What Sainesh did next opened his eyes about some of his daily habits that ate into his pocket.
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 now and then. So where does all that money go?
We often underestimate the amount of money we spend on a day-to-day basis. In fact, we tend to spend more on the little things that make up our daily lifestyle than on huge purchases. And before we know it, they add up to a substantial amount.
Additional Reading: 5 Bad Money Habits You Must Give Up
Let’s take a look at some of Sainesh’s daily habits and figure out where all his money is going. If you have similar habits, then here’s how you can rein in your spending and save more.
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 for a simple coffee.
For example, if you’re a Starbucks fan, you’d probably 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 be probably shell out around Rs. 140 to Rs. 170 on average.
Now, let’s assume you can’t do without coffee and need two cups a day. If we consider the average price of Rs. 150 per cup at one of the above mentioned places, you’re spending Rs. 300 a day. Which 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, or rather lack of it, often makes you dread the entire experience. 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 cabs easily available, you tend to rely on them heavily.
But, let’s say you take a cab to work on a daily basis. Let’s also assume you live within 10 kms of your work place and your fare usually comes to around Rs. 140 one way. But sometimes, transport companies often levy a surcharge and the same ride can then 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 for your Car Loan EMI with that money. Our rates start from 8.75%. 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 aren’t here to judge you, we’d like to show you some numbers.
Let’s say you eat out two times a day. 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.
Keep in mind we aren’t even taking your snacks and your weekend binges into consideration. So, two meals a day of Rs. 175 each adds up to Rs. 350 per day. Which means you’re blowing Rs. 10,500 on eating out every month.
BB Tip: 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 a happening city that is home to a wide range of fine pubs and microbreweries. You end up spending most of your weekends visiting these places to destress. However, drinks at a pub can be quite pricey and if you don’t stop at two drinks, you’re probably going to end up paying a lot for a hangover.
Whatever your poison is, most alcoholic beverages in a decent pub or restaurant are priced between Rs. 250 – Rs. 300. 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 cost you anywhere between Rs. 2,500 – Rs. 3,500 over a weekend. On average, that works up to Rs. 12,000 a month and a whopping Rs. 1, 44,000 a year.
BB Tip: Party animals can choose from these Credit Cards to maximise their weekend spends.
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. It’s also cheaper because of the crazy discounts you find online as compared to what physical stores offer you.
But, take a moment and think about whether or not you actually need the things you are randomly buying just because it’s on ‘sale’. Well, you may have found an item that was earlier priced at Rs. 2,000, for Rs. 999 only.
But, just because it is now priced at Rs. 999 doesn’t mean that you’ve 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, but are only buying because it happens to be on sale.
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 they are partnered with, so choose wisely.
Additional Reading: Are You Guilty Of These 7 Online Shopping Mistakes?
At a first glance these daily habits may not seem like you’re being extravagant with your spending, especially since the amount you spend on these things may seem nominal. But, in the long run, these habits will slowly eat away at your finances over time.
They say that it’s tough to earn money, but very easy to blow it all away. If you don’t curb your spending habits you could plunge into debt or kiss your retirement savings goodbye.
Financial planning is absolutely crucial. Luckily for you, BankBazaar has a ton of options for you to choose from. So, if you’re looking to invest then you’ve come to the right place!