Spending more than you earn? Here's help

Do you have to buy that new dress enticingly displayed in the shop window when you pass it? Do dinner plans mostly involve wine and a dinner jacket?

Do credit cards companies frequently upgrade you to premium cards or keep mailing discount vouchers? If the answers to most of these questions are positive, your wallet is probably biting more than it can chew.

What do you do in such a situation? Read on to gather some pointers on curbing the spending habit.

1. Plan daily expenses

Make a list of the number of days in the week you have returned home completely out of cash. Most spendthrifts are only constrained by the amount of money they carry on themselves.

With plastic money becoming the more preferred option worldwide, the sky is the limit for your expenses!

Run through your day in your mind before leaving home, and take money accordingly. Ask yourself before each purchase/ expenditure if it was planned at the start of the day. Do not exceed 10-15 per cent of your daily budget on unplanned expenses, and not more than 20 per cent for the entire week on the same.

For most working people, Rs 300-350 per day is quite sufficient for their day-to-day-expenses. So, even on the safer side, a weekly budget of Rs 3,000 should suffice. Anything in excess of this on a consistent basis might be a cause for alarm.

2. Eating out

An absolute inevitability since this is what most plans materialise into. What other options does one have in crowded cities after a hectic day at college or at work?

So, what is a good place to eat at? One with great ambience, a tempting menu or one at a plush downtown location; the answer is not as easy as it seems. A common mistake most of us commit is to expect all these factors together in a single lunch/ dinner experience.

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Over a month, split your 'perfect outing' expectations into separate inexpensive outings. Visit a place known just for its good food once, the week after that focus a little more on the ambience and less on the food. Not only will you have more outings and experiences to recount, they will also be far richer and significantly inexpensive.

Do not indulge in cola drinks/ sodas at restaurants. Avoid ice creams there too, since you needlessly pay a surcharge.

In case of an excessive order, do not feel embarrassed to ask for the remaining food to be packed. Not only will this save you some money the next day, in all probability it will beat your average meal at home hands down. 

3. Shopping

For a majority of people, shopping basically involves clothes, gadgets and other commodities. Split your shopping into two categories: necessity and splurge. After all, cutting down on expenses does not mean giving up on splurging altogether.

Frequent factory outlets for branded clothes and shoes. Also, do not let the aura of your branded apparel cannibalise each other. Mix and match your branded jeans with a plain tee or that branded tee with a shirt thrown over it.

Being noticed is not a function of your spending, but of how well you flaunt it.

When it comes to gadgets, try looking for devices with multiple features to suit your needs. For example, rather than buying an MP3 player and a stylish phone, you might want to go for a music phone.

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If you are a movie buff, a DVD player might be a cheaper option in the long run to catching evening shows in multiplexes.

4. Monthly bills

Mobile phones are one of the chief damage causers to most monthly budgets. Choose a tariff plan according to your usage, and keep checking for updated plans. This applies to heavy and moderate users alike. There have been cases where customers have paid monthly rental costs that exceed their actual phone usage.

Remember that lower call rates and higher tariffs help if you are a heavy user, not generically for all usage patterns. If you operate among a close set of friends, it will prove cheaper if you all get connections from the same service provider.

Air conditioners and boilers/ geysers are a further cause for worry at the end of each month. Set the air conditioner on timer mode and try keeping the temperature around 24 degrees.

Remember to switch off boilers while bathing; unlike geysers, they store hot water unlike geysers and are hence functional for a good few minutes after being switched off.

5. Invest

Most people have turned spendthrift these days due to the rise in the disposable incomes; also, everyone is moving up the economic ladder.

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Investing is a sensible option on many fronts: be it just saving money, getting healthy returns or tax saving purposes.

If you are a compulsive spender, try splitting your investments month-wise. This will ensure you save some money every month; these small savings add up to a healthy investment at the year-end.

You could choose between SIPs (Systematic Investment Plans) or a more secure government saving scheme.

Over-spending is a matter of habit more than anything else. Maintaining a monthly expense sheet will help you sort out most of these problems conveniently.

To help with the motivation, keep rewarding yourself with a day of splurging for a fortnight well-planned. Unlike what most people may say, over-spending is not a habit one can give up gradually.

Like most bad habits, it has to be nipped in the bud. So take charge, and spend wise.