Monday, November 28, 2011

Penny Wise, Pound wiser!

Confession....Im a chartered accountant, Im supposed to be doling out financial advice by the kilo everyday, but this is the first time Im actually doing it.

Disclaimer.. The advice in this post is not going to make you a millionaire. (It may however help you take an unplanned vacation)

Listed below are everyday tips, little snippets of advice to make your money work harder for you.

1) Say NO to plastic: This advice is as good for you as it is for the planet. As convenient and comfortable as it is, credit cards are the invisible monster under the bed. Majority of us shy away from taking loans (bank or otherwise) but dont mind paying an interest of almost 36% on our credit card outstanding balance. Make it a rule to use it only in an absolute emergency...And no, "I will absolutely die if I dont have those Aldo heels" is not an emergency.

2)Save first: When I was battling with sky high rent and cost of living and partying in Mumbai I learnt a valuable lesson. As soon as your salary is credited into your account, put some away. The best way to do it is a recurring deposit. Same amount every month.Pre- decide what you can save and stick to it, so that you are not tricked by the gleam of that Tissot watch. Another way to do it is to hike up your contribution to PF, do it, so when your salary comes to you itself you have saved. Its all sitting quietly in a corner earning away interest @ 9%.

3)Cash and carry: Especially when you are going out with a huge group and its likely to be a Dutch affair, carry cash. As much as you think you will need to clear your share of the bill. In the alcohol and friendship induced stupor you clear the bill with your plastic and tell yourself you will collect from others,but its a huge pain for your sober self to do and very often doesnt yield the required results.

4) Shop smart: This is a rule I cant follow myself. Silly as it sounds shopping for food is what makes me broke sometimes. More so when I walk into a store with the colourful peppers, the imported chocolate and cheese and fruit preserves and pasta sauces and balsamic vinegars, I just cant seem to stop. If food is my weakness, shoes or watches or clothes maybe yours.What I have decided to do is make a list of what I want, never shop when Im hungry/ emotionally unstable (the former can induce the latter for me though) and allow myself one thing thats not on my list.

5) Waste not: Often we spend on things that we dont have to or even want to, like paying bills late,unused club/ gym memberships, delaying the maintenance on your vehicle, letting your insurance lapse. Organise your monthly/ anuual payments by setting reminders for yourself. Keeping things up to date will ensure you dont spend on late payment fees and that you dont find yourself vulnerable in an emergency!