Everyone loves to save money on their purchases, whether it is on daily routine expenses, credit card purchases or big one-time purchases. Getting a bargain makes everyone happy and lets you get more on your hard-earned money.
But, in this blog, I’ll discuss some of the smart hacks that will help you save more money and you can practice it with a little tweaking in your spending habits and little awareness.
Hacks to Save Money
Use Less Cash
Avoid using liquid cash for payments as you tend to spend or lose more money unknowingly. For example, paying ₹100 on a bill of Rs 97 will fetch you ₹3 on return, but most of the time, such small amount of money goes unaccounted as we tend to give less importance to such small sum of money.
Insist on retailers and others to accept payment through digital modes like a debit-credit card, wallet payments etc. Using digital modes, you spend an exact amount on your purchases, thus eliminating wastage of money and ensures proper tracking of money spent. Your money stays in your bank account happily.
Using Fixed Deposits to Lower your Credit Card Expenses
This may sound a little confusing or out of the line in the first place, but if you can execute it properly, then you can save a lot of money.
Most of us use credit cards to buy high-value goods and then convert the purchase into flexible EMIs of 3 months 6 or 9 months.
But, as you know, credit card EMIs are not cheap as the interest rate usually ranges between 13-15% per annum and there is EMI conversion charge too. Of course, credit cards offer a very easy source of credit, but they are expensive and significantly increases your purchase cost.
In this case, you need to avail the overdraft (OD) facility against one of your fixed deposit at the bank. The OD facility is offered to you at the rate of interest offered on fixed deposit plus 0.50%. For example, if your FD gives 6% return per annum, then on the OD, it will charge you 6.5% as an interest rate. Plus, there are no other charges levied on availing the OD facility and no penalty for late payments.
Banks usually give 75% of the principal amount of fixed deposit as an OD.
Let me show you an example.
- You purchased item worth ₹20,000 using credit card
- Rather, converting it to flexible EMIs, avail OD facility against your FD and pay the total credit card bill
- Now, repay the amount withdrawn from the OD facility in equal instalments before the tenure of OD ends
Using this hack, you can take advantage of both, credit card rewards and saving money on paying the EMIs.
Remember, you should pay back the loan before the tenure of OD ends as any short balance is will be adjusted against the maturity value of the fixed deposit.
Hold Back Yourself on Attractive Discount Offers- Its a TRAP
Nowadays, retailers and brands roll out several discount offers during the year to attract customers. And, many of us take advantage of the opportunity to buy something at discounted rates.
In such discount offers, we tend to purchase more than our requirement in the belief that we are getting a better deal and it is a value for money offer. But, it’s the opposite. We tend to purchase the thing which is not required in the near term and thus drains our limited financial resources.
For example, in most discounted offers, the discount is offered on the second purchase. Like buy the first product for Rs 1000 and get 30% off on the second. Psychologically, this makes us think we are getting a good value for money offer and tends to purchase the second item, even there is no requirement.
In this case, the money spent on the second item is total loss and utility derived from using the second product is much less. Therefore, while availing the discount offer, check its utility from the financial point of view and only buy, what is required.
Concluding this article, saving money is no rocket-science, but needs awareness and common sense. If you use any hack to save money, please share with us on the comment box below. Will include in the article.