The regular readers of the blog would probably be aware of my spending philosophy by now. I am definitely not frugal but neither am I extravagant or reckless. I do believe that experiences matter most in life and many of these experiences require money to fund them. 2016 has been a year where we have ended up spending a great deal and I have tried to see that much of it is smart in the execution.
To begin with, most of my expenses are done through credit cards for a very long time now. In fact except for the few things where cash is needed like some domestic services, we do not pay through cash at all. Wherever possible, we use credit cards and for large value transactions we use direct bank transfers. In fact, we have rarely used our check books for the past few years too. This helps out in many ways – gives us a free credit period, provides credit card reward points, helps keep track of the spending and also offers many other benefits linked to travel etc. The key thing is to pay off all your credit card dues in full when they are billed – anything else will simply end up being a disaster.
Coming to the 2016 spending, let me start with the regular spending first :-
- Buying from the Supermarket is commonplace now and we normally buy from Spar, close to our home. Apart from the normal discounts, we also received some non-stick cookware as gift this year as we spent more than 20000 Rs between July and September. Last year we had got an Induction cooker.
- We go to the movies very often, catching most of the good Hindi movies and the occasional English one. Fortunately, ticket prices in Hyderabad are quite reasonable and it is made better through Bookmyshow, which allows me to get two tickers for the price of one when I use my Citibank card. Through this year we must have seen about 40 movies and the savings have been about 6000 Rs.
- We eat out quite often and it has become more expensive over the years. Our credit card reward points help out to some extent here. Just last week we had lunch at Mainland China and I was able to pay by vouchers for 1000 Rs. I had got these by redeeming the Reward points of my HDFC bank credit card. In most years we get about 5000 Rs worth dining vouchers from the multiple cards we have.
- I normally do not buy clothes much, it is clearly a necessity for me personally. This year though, I needed to buy some trousers. The overall list price was amazingly about 6000 Rs for 3 – Pantaloon first gave a discount of 2000 odd, loyalty vouchers from Max Bupa covered another 2000 and finally there was another 1000 covered by my credit card reward points. In all, I had to pay 1000 Rs for the 3 trousers and we got a bed sheet free in the bargain too.
Let me now look at some of the other purchases I made in the year, which were of a higher value. In general, I prefer buying online due to the many deals which are on offer and this year was no different.
- I had bought a Micromax phone for Lipi in 2014 and she got acclimatized to it pretty quickly. So much so, that the limited memory and storage of the phone was proving to be an issue. This year I bought her an Asus Zenfone. The list price was 11,000 odd, Snapdeal was giving it at 8000 and I got a further 1600 off through the Citi card. At 6400 Rs that I paid, it was a very good deal.
- I had bought a Sony Bravia LCD TV in 2006 when the price was about 1 lac. I wanted to replace it for a long time but for various reasons it kept getting postponed. This year I did the rounds of some stores where I liked the Android TV version by many manufacturers. However, these stores refused to give more than 2000 for my old TV which was working fine. Flipkart provided just the deal I was looking at. The Sony Android TV with a list price of 67000 was being offered at 60000, I got an exchange price of 8000 for my old TV and finally another 3000 Rs as cash back from Citibank. In effect I paid 49000 for the TV which was a great deal.
- We also bought some Balcony furniture from Amazon, the discounts and cash back were not huge there but we still managed to save about 1000 Rs from a physical store purchase.
How can you spend smart in the next year? Well, here are my thoughts :-
- Use credit cards for everything possible. Have multiple credit cards, just make sure you pay off in full whenever you get the bills.
- Accumulate reward points and redeem them for things which are useful to you. There are several categories, choose what you like.
- Always check any consumer durable from a physical store but buy it online.
- Choose sale periods, you can afford to wait for a TV etc.
- Forget frugality, you have only one life to live after all 🙂
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