We know it's horrible but someone needs to! :-/
So we got Virender Kapoor, the former director of Pune's Symbiosis Institute of Management and the founder of Management Institute for Leadership and Excellence and the author of Leadership, the Gandhi way, A Wonderful Boss: Great People to Work With and Passion Quotient, to tell us just how to get started.
Saving is an attitude.
You may have a job today but tomorrow, like several young women and men from TCS, you may not have one tomorrow.
We are living in a global economy.
What happens in Korea may affect you in ways you could have never imagined.
So always be prepared for a bleak future.
Over the years, I have seen several people earning large salaries and yet going through financial stress.
This is because most of us don't know how to manage our income.
If our salaries go up, we are tempted to spend more too.
The earlier generation believed in saving. This generation believes in spending.
Which is all very fine but whether we like it or not, financial discipline is a must and if you are finding yourself scraping the bottom of the barrel every single month, you have a problem.
So how does one cultivate the habit of saving money?
1. Accept that you are spending more than you should
You can rationalise as much as you want and tell yourself that you don't overspend or that this is how everyone spends anyway but if you cannot accept that you're overspending, no amount of advice will help you.
When you go back home tonight, take a hard look at your expense sheet and chances are you will realise there is a lot of scope for you to save.
2. You must have the discipline
Learn to say no to yourself.
We are living in a world where there is a lot of opportunity to spend money.
You have to have that discipline to say no to yourself.
Do it once, do it twice and you will realise just how unnecessary most of the things we buy are.
3. Bargain and optimise
Use technology to your advantage.
Earlier, you'd simply go to a store, pick up something you want and pay whatever the store charged you.
Today we can compare prices -- be it a phone or a refrigerator or even a pair of scissors!
Compare prices on all the shopping sites and go for the one that is selling you the product you want for the least amount of money.
Remember, all the big brands go on sale at least twice every year at the end of the season. Rather than buying clothes fresh stock, buy the ones that are on sale!
It isn't like you're following trends, are you?
Also, don't buy because there is a sale.
Don't be ashamed of bargaining -- be it while buying vegetables or buying a house.
Give it a shot; there's nothing you have to lose.
4. Ask yourself: Do I need it?
Don't exchange your old model for a new one just because you can.
If something's working don't throw it away.
Don't be taken in by brands or a product's price.
A 2000-rupee shirt should not make you feel big or small.
Don't let material things define your sense of self worth.
5. Don't be brand conscious but...
While I have spoken about not being brand conscious, there are certain exceptions to the rule.
For example if you're buying a household product or a vehicle, it might be a good idea to invest in a branded product rather than a cheap imitation.
Because with such products you are more likely to get a better quality piece and a better after-sales service than its cheaper competitor.
So don't be penny wise and pound foolish.
Learn to understand the difference.
6. Don't swipe that card
When you swipe a card -- debit or credit -- you don't realise how much you've spent until much later.
Instead, consider spending in cash.
Taking out 3000 rupees from your wallet and swiping a car for the same amount are very different experiences.
Swipe is synthetic but when hard cash goes out of your hand, you will most certainly feel the pinch.
And chances are you won't spend as much.
Cards are meant for convenience.
Don't let them act like a hangman's noose
7. Remember, there will be a rainy day
We often tend to block our minds to the fact that we may suffer from a major illness or have a major accident.
Like it or not, unforeseen expenses will crop up.
Be aware of this all the time.
If you are married, know that both of you need to be prudent.
If you are single, make friends who are thrifty; if you are with spendthrift friends there is a good chance you will end up spending more than you should.
8. Invest in yourself
Education is the best investment.
Unlike everything else, no one can steal it from you.
Sounds old fashioned perhaps. But it is as true as it gets.
9. Learn to cut corners
Divide your 'needs' into three categories:
- Must have
- Should have
- Could have
Don't compromise on the first; consider spending on the second and avoid the third for as long as you can.
Divide your budget into three categories too
- Standard expenses
... in this order.
Ensure you put away at least 10 to 15 per cent of your take-home pay every month.
Make that the bottom line and ensure you don't go below that.
It isn't very difficult if you think of it.
If you have money after your basic expenses and savings, then choose to splurge.
10. Never delay repaying your dues
English is a wonderful language; it is precise when it comes to defining concepts.
For instance when your cheque 'bounces', it is being dishonoured.
There is dishonour in not being able to pay someone an amount you've promised.
But apart from all of that, know that when you delay repaying your debts, your CIBIL rating is affected.
All of it will matter when you have to apply for a loan the next time around :-)
11. Simplify your life
I am not saying you should become a saint but the more you simplify your life, the better chances of you being able to save more money.
Eating at home instead of eating out; take public transport; ask yourself if you really need that AC or that car or that bike or that iPad.
Life in the slow lane isn't altogether bad; in fact it will help you stay sane and live a more fulfilling life.
Virender Kapoor, the former director of Pune's Symbiosis Institute of Management and the founder of Management Institute for Leadership and Excellence and the author of Leadership, the Gandhi way, A Wonderful Boss: Great People to Work With and Passion Quotient
Lead image used for representational purposes only.
Photograph: Maksim Jeskevic/Creative Commons