Who would not like to save some money? Here are 7 effective and simple ways to save money you can start following right now. When it comes to FIRE, I never tried to cut down on my expenses, instead, I simply try to make the value of my money more. So, these steps are around how to save money with smarter planning and decisions, not about cutting expenses.
#1. Credit Cards are your best friend!
Here is a Big Bloody Disclaimer!
Credit cards are pretty harmful if you don’t know how to use them and don’t have a discipline. I am serious, the interest rate on credit cards is around 35% to 50%. So, skip this step and stay away from credit cards if you don’t know how to use it.
Credit card give you Loyalty Points
Unlike cash or Debit cards, Credit cards offer loyalty points for using them. This is to stimulate customers into buying more. But then again, if you are smart and just buy what is required, you get to offset about 0.3% to 1% by earning back what you spend as points
Get 40 days extra time to pay
Let me give you my example of how I use this. My card’s bill is generated on 14th and I need to pay by 30th. When a big purchase is required or an insurance needs to be paid, eg: Rs.50,000, I wait and use my card on 15th after the bill is generated. Since I use it after and my card is always paid on time, I need to make this Rs.50,000 payment only on the 30th of next month (after my next bill for 15th to 13th of this cycle is generated on 14th of next month). Now, if I will be getting the money later, I make sure it is there before 30th to repay this. If I have the Rs.50,000 on hand, then I put it in an FD for 40 days, so I get an additional 1% off as Interest earned for this 40 days.
Offers when you need something
10% off for Axis bank card holders on Flipkart, 15% off on HSBC card holders on Amazon and so on. Have an optimized credit card stack to be pick up almost anything on offer.
Read more on my credit card stack.
#2. Instant Gratification is a Bytch:
Don’t be one of those idiots who say “I buy whatever I want, whenever I want”. Impulse based buying is what keeps the retail industry alive. FIRE practitioners are far smarter. Plan your purchases and stay alert. Keep track of what goes on during Black Friday, Independence day, Boxing Day, Diwali, etc. In my case, I even buy groceries at the start of the month when Amazon and Flipkart have their grocery sales. This usually gets me 15% to 30% off the usual price excluding the card loyalty points, cashback etc.
#3. Branded stuff are not bad on your wallet
People advising to cut cost will say buy cheap clothes to save money. Puck them. Buy BRANDED clothes and accessories. A pair of Levis pants I picked up in college is still in good condition with regular wear, some other shitty jeans will not last half as long. I used an iPhone SE for 6+ years with intense use and finally sold it on OLX for 50% of it’s purchase price. My mom has to keep changing her VIVOs and MIs every 2 years, and they have no resale value.
Choose utility over luxury: A pair of designer GAS denims is not going to get you laid. Nor is it worth paying Rs.20K for. Just because I say branded, does not mean you go for senseless luxuries. Choose wisely and pay the extra buck for good quality branded products that will last several years more than a non-branded cheaper one. If a cheap non-branded is sufficient and you don’t need it to last that long, go for the cheaper alternative.
#4. Quickride is awesome
If your city has a carpooling option such as Quickride, start using it at once! Check out my Monthly progress updates, I make about Rs.8000 every month by sharing my rides with people who are on my way. Even if you don’t want to drive, start taking Quick rides to your office. In my case, someone who rides with me to office pays me Rs.120 for a one way trip. The same with Ola or Uber would cost them Rs.650 or more. This is a win-win for all!
#5. Refurbished Electronics and Gadgets
Second-hand is not un-cool. It is a smarter way to own the finer things in life if you know how to choose and buy. My gadgets, electronics and some fine furniture are all refurbished or second hand.
Here is how I got a Rs.63,000 dining set for Rs.18,500. It took me a few months and a bit of searching, but well worth it.
- Main dining table
I got a refurbished wooden dining table online for Rs,12,000. Actual cost was over Rs.35,000. It was being sold cheap since there was a deep scratch on one of it’s side legs. I simply placed the scratched leg against the wall so it can’t be seen by anyone.
- 2 stylish barstools for 1000 bucks
Later I picked up 2 matching bar stools for Rs.1000 from a couple who were moving abroad. The stools would cost Rs.8000+ if bought new.
- A matching wooden bench to complete the set
And finally, I used some coupons and exchanged a old cupboard to pickup a matching new Bench to make a full dining set. The bench was worth Rs.12,000, post exchange and coupons, I got it for Rs.4,500.
- Don’t stop there. Periodically de-clutter things you dont use by selling them on OLX/Quikr etc. As a rule of thumb, if you have not used something for 6 months then mostly you can live without it. Use these funds to invest or buy other things.
- I also keep an eye for Boxing day, Black Friday deals from abroad and have friends pick up costly electronics for me and drop it off when they get here.
- Join Facebook groups in your locality such as Second-to-none etc. There are a lot of people who go abroad and need to give stuff away, sell urgently etc.
#6. Cashkaro and CRED
Cashkaro helps you get more cash
Cashkaro is a great place for picking up more offers. More importantly, you will get additional cashbacks for visiting websites through them. Eg: Say you need to buy a chair. Go to Cashkaro, then click on Amazon and then pick up a chair you like. You will get the usual offers and discounts from Amazon. Since you went to Amazon through Cashkaro, Amazon gives Cashkaro a % of your purchase as a referral commission. This is shared with you by Cashkaro. You get a cashback between 3% to 15% depending on item and where you buy. Cashkaro is the first place I visit before buying anything. So far I have made over Rs.14,000 by making usual purchases through them.
Sign up for Cashkaro using this link to start earn additional cashbacks and joining bonus.
CRED gives you rewards for paying your credit cards
CRED is a platform for you to pay your Credit card bills. There are no extra charges to paying through CRED. In fact, for every rupee you pay through CRED you earn a CRED point, which then can be used to redeem for goodies, vouchers etc. I have scored a lot of good stuff from free socks to dinners in 5 star restaurants from CRED.
Sign up for CRED using this link to earn additional joining bonus and points on paying bills.
#7. Efficiently plan on Taxes
This is a killer! Plan your taxes efficiently. Seek professional help if you can, it is worth it. Say Ram and Shyam earn Rs.13 lakhs each per year. Ram with proper tax planning can pay Rs.20,000 as taxes for the whole year, while sucker Shyam ends up paying Rs.20,000 per month as taxes. It is a big deal. Use the options available to you. Remember, Tax Evasion is a crime, Tax planning is smart money management.
Apart from these, start building a steady stream of Passive income. This will gradually grow big and soon start supplementing your income.
Ask your questions in the comments below and share your ideas and thoughts. It would be nice to hear from you.
Some questions on Easy ways to save money
Yes of course. There are a lot of ways to save money while studying. Share notes, avoid costly parties. Know how to handle peer-pressure (the need to do something because others are doing it). This may push you to start smoking, drinking, drugs. In milder forms, peer-pressure makes you want to get designer clothes or costly mobiles and flashy bikes to match up with richer friends.
There are several apps and methods. Start putting away all loose change you have in your wallet at the end of the day. Over a period of time this will become a big amount. Another way is to impose punishments on yourself to form a good habit. Say you want to study everyday for 1 hour. Every time you miss studying for an hour in a day, impose a fine of Rs.50 on yourself. This money can accumulate over a period of time. On the plus side you form good habits and as a bonus, you have saved some money. Just make sure you follow it with discipline, if not you are only cheating yourself.