Just a few days back, while chatting on google talk, I was sharing my experience of student life or rather hostel life with an old friend. I was recollecting those days when I used to stay in a hostel at Indore and apart from studying, spent a lot of time on managing my finances. At that time, finance was just about managing the monthly expenses, because other aspects of personal finance were hardly in my control. My income was in the form of remittances in the savings bank account, and as the monthly expenditure was almost equal to, or sometimes even greater than the monthly income (thanks to my ‘AAA’ Credit Rating, as a result of which I was able to secure funding from external sources), no question of saving and investment was there. But one day I realized that just by making a few efforts, I was not only able to limit my expenses upto the level of my income (the monthly remittances) but also managed to save. So here are a few tips on how to manage the expenses which I would like to share with all those who are either the source of expenditure( the students) or the source of income(their parents).
For the sources of expenditure :
1. Start with preparing a monthly budget. Segregate your expenses budget into different sections like books, travelling, entertainment, cell phone recharge, apparels & accessories, etc. . Keep aside some fund to meet contingencies like buying a birthday present for a day old friend.
2. Never keep too much cash. More the cash you have, more difficult it is to resist the temptation of spending it.
3. If you have moved to a different state, try to buy a local SIM card as soon as possible, as it will save you from paying the roaming call charges on your home state’s cell number.
4. Look for a tariff plan according to your use. If possible, call people at night as many cell phone operators have low night calling charges.
5. Avoid going to a multiplex on weekends, but if you are too busy with work or studies during the week, go for the morning shows on weekends as they are still cheaper than the night ones.
6. If the reviews for a movie are not good, you can even avoid the multiplex and save a few hundred rupees. Go for a DVD and enjoy on your laptop.
7. If you are staying far from your place of work/study, use as much public transport facilities as possible – bus, local, metro.
8. If you are using a vehicle to commute, never hesitate in sharing it with your friends. Whether you go alone or with your friends, its going to consume the same amount of fuel. This way you can easily share the cost of fuel with them, and if you are not the kind of person who would ask for a 50:50 share, you can still get the tag of a helpful friend.
9. In case you are a brand conscious person, try to take complete advantage of the seasonal sale where you can get decent discounts, even if it requires buying sweaters in summers. After all, brand matters.
10. Look for friends who are willing to shop in the near future. Compel them to shop with you and go for a single bill. You may earn some extra discount or goodies on such bulk purchases.
11. Avoid having roadside panipuris and chaat, specially during the rainy season. This will not only help you to stay healthy and but also limit your medical bills.
12. If you are planning to go home during the vacations, plan well in advance and you can easily save the tatkal charges of Indian railways.
13. Develop a habit of writing your expenses. This will help you to analyze your expenditure pattern and avoid overspending.
14. By the end of the month, try to save some amount, which can be used for three purposes –
a. Lend it to a friend and make him feel indebted to you
b. Go out and party, or
c. Take something special for your parents, brother or sister, whenever you go back.
15. You are your best judge, analyze your habits and way of living, and look for better ways to limit your expenses.
For the sources of income : Ask your ‘sources of expenditure’ to follow all the above points.
After all, a penny saved is a penny earned.
CAclubindia
