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Three spending oversights you can fix

As consumption habits get nudged with easy digital access, you need to start thinking about smart ways to control the outflow.

Investing can’t begin unless you start saving and saving doesn’t begin unless you control spending. If you have understood the importance of creating wealth through long term investments that supplement your earnings, then you must understand the importance of enhancing your savings through sustainable spending habits. 

As consumption habits get nudged with easy digital access, you need to start thinking about smart ways to control the outflow.

1. Buying on discount or over buying
Its great to wait for the discount sales and buy, but have you ever noticed, the discounted price tag is covering up another price tag below? Sometimes, the original price is marked up before a sale, be careful about this especially when it comes to apparel and shoes. In sale season you will also notice that the stock and styles are not from the latest collection. Here too, older inventory is pulled out. 

Don’t will yourself into buying something just because it’s sale season, rather than saving you can easily end up overspending. Online sales are also very enticing and the nudge comes in the form of packaged buying options. However, you may not really need the other items being suggested along with the one item you set out to buy. Lastly, avoid offers that nudge you to buy one more item and get the big discount. You will end up spending 20-25% more to get a 30% discount; you really didn’t need that last item, hence you just saved 5%!
 
Moreover, keep a track on what happens to refunds and loyalty points. If your refund does not go back to the bank account, it will lie in the wallet once again a wasted balance to hold.

2. Money app balances
Do you shop a lot online using digital wallets or even net banking? Nothing wrong with it but be aware not to leave large balances in digital wallets. Money is best left in the bank instead as you will continue to earn interest on it. Digital wallets can keep your money safe, but you earn nothing on the balance.

Moreover, keep a track on what happens to refunds and loyalty points. If your refund does not go back to the bank account, it will lie in the wallet once again a wasted balance to hold. Make sure you keep checking this and using up the refund balance to pay for subsequent purchases rather than adding fresh funds. 

3. Online charges
Many digital transactions have things like convenience fees, delivery charges, online fee and so on. The amount itself may seem nominal, but when you add all such charges the aggregate comes to a lot. In a month, its easy to have grocery delivered 10 times, book movie tickets online at least twice and have food deliveries 3-4 times. Delivery and convenience charges on these can easily add up to a total of Rs 1000, even though individual deliveries are charged at Rs 40-50. 

Try to bunch up your online orders and have them delivered together. Even if you save half the amount, Rs 500 SIP for 10 years in an equity-oriented fund can potentially add more than Rs 1 lakh to your wealth.  Plan your outings and buy tickets beforehand at the outlet to save on convenience charges. It sounds like saving pennies, but again add it all up and you’ll see it’s a substantial amount.

Being a smart spender can add well to your investment kitty and that really makes you a smart investor!
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