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“How not to spend more than your salary!”

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Spending more than your salary??? Well, it’s a common case these days, especially for bachelors living away from their hometown. The major portion of the monthly income wipes out in the first week of getting the salary. House rent, utility bills, maid and groceries are the major part of the monthly expenses. Let’s take a case of a common guy Ashish and see how he manages his expenses.

So, Ashish came from Vizag to Hyderabad as he got a job in an MNC. As a fresher, he is getting 20k take home after all the deductions. Although he is not too excited about his income, but he is very much excited about exploring this new city and make some new friends. To start the things, he took a room in the shared flat and shelling out 5000 per month as the rent including maintenance. Although he eats outside most of the time, still he shells out 3000 for cook and grocery every month.
Young employees like him waste lots of money on unnecessary things and most of the time it’s too late when they realize the same. In Ashish example, he eats lunch outside and it costs him 150 every time. Taking 22 working days in a month, he is rolling out 4400 just for the lunch. Apart from that weekend are party days, going to movies, dinner is necessary. 6 movies in a month, which will cost somewhere between 1000-1500. Dinner with friends, costing 2000 per month. Don’t forget about phone and internet bills of 1500. Also, there will be some fees for polluting while hanging out as well and that is petrol for the bike which will be somewhere around 1500. And to sum it up, he will buy some clothes every month (Rs.2000).
Consequently, if we add up all the expenses let’s see if Ashish is in surplus or deficit.
House Rent: 5000
Cook & Groceries: 3000
Lunch: 3300
Entertainment: 1500
Eating out: 2000
Phone: 1500
Petrol: 1500
Cloths: 2000
Total: 19800
You must be wondering, what he will be doing with 200 bucks? Let’s leave the poor guy alone. Furthermore, he is waiting to complete the 3 months at the job so he can apply for a credit card as he is aiming 60k worth phone which is going to release next month.
That is the lifestyle of a young man in a cosmopolitan city these days. Even lots of people in their 40’s carries the same lifestyle, with multiple EMI and lavish lifestyle at their disposal.
Now let’s talk about how we can come out of this habit of overspending. First thing first, you need to differentiate among your needs and desire. Mostly it’s our desire which leads us to the overspending, poor needs don’t ask much. Being frugal doesn’t mean you skip one meal a day or don’t run AC in 45 degrees Celsius. You have to understand what is good and what is not.
The crave to have that lip-smacking burger and that jaw-breaking pizza, a thirst which will only satisfy with a bottle of cola and the craze to welcome the weekend with a bottle of alcohol and ending the same weekend with lots of waste food. These all things are the sole reason why a youngster overshoot his income and all of them can be controlled with a steady and focused approach.
I personally remember we used to go to a hotel for dinner twice or thrice in a year with my parents. Back then people were more interested in cooking verities of food at home and share the same with neighbours. We used to cook some delicacy someday and our neighbour too on alternate days. So it kept us quite busy and satisfy the crave, we used to have for different food items.
The human need to explore to learn and to explore he needs to try things which are alien to him. Same thing happened to me when I ate my first burger or when I first tasted the alcohol. Scarifying some money for curious mind is fine but being an addict of the same is not. So Ashish decided at last, to put a leash on his spending habits and fixed some of his expenses. At first, he started taking the lunchbox to the office and completely stopped eating lunch outside, sometimes he goes with colleagues to have a samosa or tea outside in the afternoon. He also reduced the number of movies to 2-3 per month and joined swimming classes every alternate weekend at the rate of 200 per day. He uses the company bus for commuting to the office and stopped using his bike unless necessary which will save him around 50% in petrol expenses.
So let draw some figures:
Salary: 20,000
Rent: (5000)
Grocery and cook: (3000)
Recreation expenses (movies, swimming etc.): (2000)
Petrol: 750
Phone + internet: (1000)
Dinner outside: (1000)
Other expenses: (1000)
Total Income 20000, Total expenses (13750)
So as you can see Ashish saved 6050 by just following a disciplinary approach. He can buy a health insurance for him and the family, also he can plan for his passions rather than taking a loan for it. If he wants to buy a camera worth 80k for fulfilling his passion in his photography he can do it rather than using a credit card for it. He just needs to save 5000 per month for a year and he will be ready with 60k plus interest in his hands.
So a few points to be noted especially for young earners:
• Do focus on your eating out expenses, you can save lots of money here
• Do not use or take a credit card in the initial years of your job. You just joined a company and you will not be sure if this sector or the company is suitable for you. In case you have to leave the job, you will find yourself in a problem with credit card EMI’s in your hand.
• Plan your expenses well in advance, you can allocate the budget in the beginning itself. For example, I can do well with 12 k every month and I have to manage everything within this only.
• Start saving as soon as possible. In the begining, investment instrument is not as important as investing experience, so do not fear to venture out of your comfortable zone.

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