Saving dear money for a better life

How much do you earn in a month? When are you going to join the six-digit club? Do you earn more than the peer company? We are often asked many such questions. 

But nobody asks us how much we spend. What amount of money do we need for paying bills or what is the daily expense limit for luxury. You surely want to stay well ahead of your equilibrium. Here are some tips on making the most of your salary.  

My grandfather used to say that saving is the best policy. I agree with him. But I have modified it to say that saving is the best policy if you can make the policy and stick to it. 

Imagine you are a business, and you have assets stashed in warehouses, machines in the assembly lines, but no raw materials or workers - this renders your stashed assets obsolete. 

Now, imagine you have both raw materials and workers. You can use the raw materials for expected output and reduce the number of workers to ensure productivity to reach the same output level. 

Therefore, your monthly fixed costs – utility bills, loan repayments, rent, credit cards etc. can be thought to be the cost of raw materials per month. And the money you spend on lifestyle or "better than regular" deals can be considered as the workers' productivity. The latter one is variable and the first one is quasi-fixed as it varies month to month, but you cannot rule those out.

Illustration: TBS

Keep your credit card in the forefront of your mind ten days prior to receiving your salary. For most of us, who have credit cards, keep them in your home, preferably in a safer place. Credit cards can create an illusion of wealth all the while eating at your purchasing power, especially when you have to make urgent payments like hospital bills, accidental expenses etc.

One week after receiving your salary, forget about it. Just do this if you are a serviceman on the payroll, it will work miracles. Avoid using ATMs or credit cards for seven days after your income is credited to your account. 

If you enjoy nature, go for a walk around the streets. Make yourself believe that your salary will be credited after one more week. If you truly need a shirt or a delicious lunch, search your messages for businesses with heavy discounts or B1G1 deals.

Use an expense manager app to keep track of your expenses and savings. Despite trying hard to save money, oftentimes you will find that most of your money has been spent on miscellaneous expenses. 

An expense manager will allow you to limit your expenses and record your transactions. By restricting your daily limit of expenses you can work towards a better life.

Cap your daily expense budget. Calculate the amount after deducting your monthly fixed obligations – house rent, basic groceries, utilities, credit cards bills, EMIs – divide the remaining amount by the days you have until your salary gets credited. Whenever you put your hand in your wallet to make a purchase, think about the room you have in your expense limit. It is easy to calculate and make quick decisions on unnecessary purchases

Always make a list before going out to buy groceries. Before going out, thoroughly check your pantry, stocks of commodities -  how many litres of soybean oil are left in the bottle? Do you have a pack of aromatic rice left for a good treat? Is there enough toiletries in stock? 

Doing a check will allow you to devise a comprehensive and well informed grocery list. These little changes will make a big impact in your month-end positions.

Make your car lighter so it can be more fuel-efficient. The less you drive in Dhaka streets, the shinier your car looks. Put a shackle on your transportation expenses. Consider carpooling with colleagues and neighbours once a week, and offer the same to them. 

This will make the morning commute pleasurable and also allow you to save money. And you just might be able to glean more money-saving tips and tools from them. 

Adnaan Jamilee is the Head of E-commerce and ICT Financing at Brac Bank Ltd. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.