Urfinpal

Similar to Hindu God Chitragupta who keeps all our records,these agencies are watching our credit transactions.Coming soon
“Everything about Credit Bureaus and Credit score”.
Mind you it is beyond CIBIL.

𝐏𝐀𝐑𝐓 𝟐-𝗖̲𝘂̲𝘁̲𝘁̲𝗶̲𝗻̲𝗴̲ ̲𝗗̲𝗼̲𝘄̲𝗻̲ ̲𝗘̲𝘅̲𝗽̲𝗲̲𝗻̲𝘀̲𝗲̲𝘀̲ ̲-̲𝗕̲𝗮̲𝗻̲𝗸̲𝗲̲𝗿̲𝘀̲ ̲𝗜̲𝗻̲𝘀̲𝗶̲𝗱̲𝗲̲𝗿̲ ̲𝗚̲𝘂̲𝗶̲𝗱̲𝗲̲ ̲𝗧̲𝗼̲ ̲𝗪̲𝗲̲𝗮̲𝗹̲𝘁̲𝗵̲ ̲𝗖̲𝗿̲𝗲̲𝗮̲𝘁̲𝗶̲𝗼̲𝗻̲ ̲𝗮̲𝗻̲𝗱̲ ̲𝗟̲𝗲̲𝗮̲𝗱̲ ̲𝗔̲ ̲𝗗̲𝗲̲𝗯̲𝘁̲ ̲𝗙̲𝗿̲𝗲̲𝗲̲ ̲𝗟̲𝗶̲𝗳̲𝗲̲
𝐏𝐀𝐑𝐓 𝟐
As we learned in Part 1 that cutting down expenses is the key mantra to save more money, and it is advised to have a meaningful cutdown of daily expenses like buying coffee or going to a movie, and over the period it might save quite a bit.
But these small purchases are not the costs that you need to control, instead, the focus should be on bigger expenses.

Irrespective of the part of the world where you live,50-60% of your total household budget is accounted for Big3 (as per Ben Leforte ) viz ..𝐇𝐨𝐮𝐬𝐢𝐧𝐠, 𝐓𝐫𝐚𝐧𝐬𝐩𝐨𝐫𝐭𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐅𝐨𝐨𝐝.

1. 🅷🅾🆄🆂🅸🅽🅶 :
It is said that Housing cost is 37% of your total budget.
Factors associated with House cost are
𝘔𝘰𝘳𝘵𝘨𝘢𝘨𝘦 𝘱𝘢𝘺𝘮𝘦𝘯𝘵
𝘗𝘳𝘰𝘱𝘦𝘳𝘵𝘺 𝘵𝘢𝘹
𝘏𝘰𝘮𝘦 𝘐𝘯𝘴𝘶𝘳𝘢𝘯𝘤𝘦
𝘚𝘰𝘤𝘪𝘦𝘵𝘺 𝘤𝘩𝘢𝘳𝘨𝘦𝘴
𝘜𝘵𝘪𝘭𝘪𝘵𝘺 𝘣𝘪𝘭𝘭𝘴.
𝘏𝘰𝘶𝘴𝘦 𝘮𝘢𝘪𝘯𝘵𝘦𝘯𝘢𝘯𝘤𝘦 𝘤𝘰𝘴𝘵(𝘰𝘯 𝘢𝘯 𝘢𝘷𝘦𝘳𝘢𝘨𝘦 1% 𝘰𝘧 𝘷𝘢𝘭𝘶𝘦 𝘰𝘧 𝘩𝘰𝘶𝘴𝘦 𝘱𝘦𝘳 𝘺𝘦𝘢𝘳)

How is it possible to reduce with increasing prices on the above factors?

𝗮. 𝗗𝗼 𝘄𝗲 𝗿𝗲𝗮𝗹𝗹𝘆 𝗻𝗲𝗲𝗱 𝗮 𝗯𝗶𝗴𝗴𝗲𝗿 𝗵𝗼𝘂𝘀𝗲?
̑̇̈
In the last 3 decades size of the family is getting shrunk and contrarily size of the house where this family is being put up has increased.
6 years back I used to live in Hyderabad where the average flat used to be 900-1200 sq ft but now I have seen people in Mumbai comfortably leading their life in 500-600 sq ft houses. It is all in the mindset and circumstances.

If you have an empty unused room, you can't avoid the inherent costs involved in it. Most of the time we don’t need big houses. The bigger the house bigger is the loan and higher interest, maintenance, and taxes.

If you have already bought a big house and you have unused space consider renting out your room, renting it to Airbnb, or share with a roommate if you rent alone.
You have money and want to invest try to buy multi-family property(while living in one and renting out others).

𝗯. 𝗖𝗼𝗻𝘀𝗶𝗱𝗲𝗿 𝗺𝗼𝘃𝗶𝗻𝗴 𝘁𝗼 𝗶𝗻𝗲𝘅𝗽𝗲𝗻𝘀𝗶𝘃𝗲 𝗮𝗿𝗲𝗮𝘀.

Now work from home culture is widely used during covid times and we don’t need to reside near offices, can save much on rent and loan.

(We will discuss how to reduce other household utility bill expenses and insurance in a future post in detail)

2.🆃🆁🅰🅽🆂🅿🅾🆁🆃🅰🆃🅸🅾🅽:

Petrol and Diesel rates are touching ever high in India, if not acted upon we need to revise all our monthly budget for expenses, thus comes the importance of Transportation cost.

If you own a home at least it has a value that appreciates over the period, but can't understand the appeal, bigger and sporty "CAR" culture which is a depreciating asset.

Decide with the opportunity cost of owning a car Vs not owning a car. The biggest expenses owing a car are
𝗠͙𝗼͙𝗻͙𝘁͙𝗵͙𝗹͙𝘆͙ ͙𝗽͙𝗮͙𝘆͙𝗺͙𝗲͙𝗻͙𝘁͙ ͙
͙𝗗͙𝗲͙𝗽͙𝗿͙𝗲͙𝗰͙𝗶͙𝗮͙𝘁͙𝗶͙𝗼͙𝗻͙.͙

People buy cars because of easy loan availability, that does not mean one can afford the car. Beyond capacity, ignorance, and under emotional influence people take loans and fall into the trap.
Having a car is only viable if the family consists of 4-5 people, otherwise, it is a burden in your journey to your financial freedom. And having a 2nd car for a small family, left to your imagination.

𝐇𝐨𝐰 𝐭𝐨 𝐫𝐞𝐝𝐮𝐜𝐞 𝐓𝐫𝐚𝐧𝐬𝐩𝐨𝐫𝐭 𝐞𝐱𝐩𝐞𝐧𝐬𝐞𝐬:
a)I have started using my Two wheeler more often to the office instead of using the car. It is more fuel-efficient and I am saving at least an hour of time in Mumbai traffic, of course with all the safety guards on while using a two-wheeler.

b)Usage of bicycle, a body exerciser cm money saver.

c)Use public transportation like local trains, metro or buses. If you can avoid the busy hours you will get time to read that novel pending for many days or to listen to that audiobook or podcast.

d)Car-pooling is another brilliant money saver on transportation expense, you only need to activate your personal network to search like-minded people in and around.

e)Those BMW, Benz or Audis are good for your social status but they are money drainers, your old Maruthi Car might be fuel-efficient and require less maintenance.

f)If you are not using your car frequently consider it for disposing of. Because Car is a super depreciating asset, its value decreases by 20% every year. If you sell your unused vehicle you will save maintenance, Insurance, monthly installment if taken on loan, that painful recurring insurance, parking expense. You always have multiple alternative options of using Uber or Ola, can hire a variety of different cars using Zoom car, etc, no bindings, and more freedom.

g)Punctures or wheel maintenance is a frequent issue I face with. Maintaining tyre by properly inflating to optimal PSI will save unwanted expenses. Every 2% reduced PSI affects your fuel bill by 1%, so get your tyres checked whenever you visit fuel stations, it is a free service mostly(I always fill my fuel in the late evenings to avoid those big ques).

h)Always verify your service/maintenance bills charged by service centers. Ask for discount on service/maintenance bill, sometimes they discount charges of some routine activities. You can use apps like gomechanic.com, gobumpr.com which provide great services similar to the authorized centers at a fraction of the cost.

3.🅵🅾🅾🅳:
The only way to reduce food expenses is to reduce eating outside. Bringing down the cost per meal is the key mantra.

a) As per studies it seems it is expensive 5 times more per serving to eat at a restaurant than cook your own meal. Avoid eating fancy restaurants, except ambiance you can get almost similar good service and quality food in most of the local hotels.

b) I am not advocating avoid eating out in total. Celebrating the occasion and trying an experience has got its own value in life. If it is an occasion where you want to celebrate in a restaurant use apps like dine out, eazydine, Zomato, etc to get fair discounts.

c) Have a heavy breakfast to reduce the random intake of snacks and junk food.

d) Plan a candlelight dinner at home instead of eating out, it is fun gathering the entire family for dinner. My friend Kishan’s family generally have their dinner on the terrace on full moon day, it is altogether a different experience eating under a full moon.

e) Grow your home garden. Use your balconies and terrace to grow small veggies and lentils. They are fresh and handy generally give a good feeling.

f)Grocery bill can be reduced
1.Having a plan and shopping list will make a less prone to window shopping.
2.Focus on price per serving, buying in bulk is the solution. Check amazon's price it gives price per/100 ml, or price per/100g to compare, instead of the sticker price.
3. price hunting: Check online or enquire about different stores for comparing prices.

Tʜɪɴᴋ ᴏғ ғᴏᴏᴅ ᴀs ᴍᴏɴᴇʏ: ɴᴇᴠᴇʀ ᴡᴀsᴛᴇ, ᴀs ᴘᴇʀ NRDC 40% ғᴏᴏᴅ ᴘʀᴏᴅᴜᴄᴇᴅ ᴇɴᴅs ᴜᴘ ɪɴ ᴡᴀsᴛᴀɢᴇ.

The big 3 expenses Housing, Transportation, and Food will make or break in the journey to reach your financial goals, the first place you should be looking to cut back on your spending is on these big 3 fatty elements.
It requires sacrifice on your lifestyle or dedicating more time to reducing spending. Always ask is it worth sacrifice or to save more money. These savings have got value if they are only directed to investment, which should be automated.

PS: My thought process expressed here might reflect my middle-class upbringing and few might not have liked it, but it is crucial to manage these critical things and savings over a period can definitely help. I believe in the law of abundance, wealth creation is everyone's right, and my writings are aligned to it.

𝗖̲𝘂̲𝘁̲𝘁̲𝗶̲𝗻̲𝗴̲ ̲𝗗̲𝗼̲𝘄̲𝗻̲ ̲𝗘̲𝘅̲𝗽̲𝗲̲𝗻̲𝘀̲𝗲̲𝘀̲ ̲-̲𝗕̲𝗮̲𝗻̲𝗸̲𝗲̲𝗿̲𝘀̲ ̲𝗜̲𝗻̲𝘀̲𝗶̲𝗱̲𝗲̲𝗿̲ ̲𝗚̲𝘂̲𝗶̲𝗱̲𝗲̲ ̲𝗧̲𝗼̲ ̲𝗪̲𝗲̲𝗮̲𝗹̲𝘁̲𝗵̲ ̲𝗖̲𝗿̲𝗲̲𝗮̲𝘁̲𝗶̲𝗼̲𝗻̲ ̲𝗮̲𝗻̲𝗱̲ ̲𝗟̲𝗲̲𝗮̲𝗱̲ ̲𝗔̲ ̲𝗗̲𝗲̲𝗯̲𝘁̲ ̲𝗙̲𝗿̲𝗲̲𝗲̲ ̲𝗟̲𝗶̲𝗳̲𝗲̲

𝐏𝐀𝐑𝐓 𝟏
Wealth creation is not Einstein’s relativity theory that only few can understand. All wealth creation techniques boil down to only two prime factors.

1.𝕴𝖓𝖈𝖗𝖊𝖆𝖘𝖎𝖓𝖌 𝖎𝖓𝖈𝖔𝖒𝖊
2.𝕽𝖊𝖉𝖚𝖈𝖎𝖓𝖌 𝖊𝖝𝖕𝖊𝖓𝖘𝖊𝖘.

𝐑𝐞𝐝𝐮𝐜𝐢𝐧𝐠 𝐄𝐱𝐩𝐞𝐧𝐬𝐞𝐬 is a more complex subject when compared to Income generation because it requires altogether a different mind set and discipline.

In general, "𝑡ℎ𝑒 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑜𝑓 𝑙𝑖𝑣𝑖𝑛𝑔 𝑖𝑚𝑝𝑟𝑜𝑣𝑒𝑠 𝑤ℎ𝑒𝑛 𝑖𝑛𝑐𝑜𝑚𝑒 𝑟𝑖𝑠𝑒𝑠 𝑎𝑛𝑑 𝑙𝑢𝑥𝑢𝑟𝑖𝑒𝑠 𝑎𝑛𝑑 𝑐𝑜𝑚𝑓𝑜𝑟𝑡𝑠 𝑏𝑒𝑐𝑜𝑚𝑒 𝑜𝑢𝑟 𝑛𝑒𝑐𝑒𝑠𝑠𝑖𝑡𝑦."

In this series of posts, I am not advocating to cut down those little things which give you a sense of satisfaction.

Expenditure incurred in watching a movie of your favorite actor, buying that gift to surprise your partner, the time spent in that bar with your friends on that weekend, that brownie dipped in the ice cream which activates your taste buds, or that occasional fag when you want to feel light, etc are the type of things which have to mean only when they are done contextually, delaying these satisfactions will make the life tasteless and worthless.

On account of my job in the financial industry, I have closely witnessed people who struggle to keep up with their expenses irrespective of their good income levels. Some of them are so careless, clueless, and ignorant about their financial situation and just waiting for some miracle to happen in their life.

Cutting down your expenses requires good preparation.

𝗖𝗿𝗲𝗮𝘁𝗶𝗻𝗴 𝗮 𝗕𝘂𝗱𝗴𝗲𝘁- Decide how much you want to spend and just stick to it.

𝗧𝗿𝗮𝗰𝗸𝗶𝗻𝗴 𝘆𝗼𝘂𝗿 𝗲𝘅𝗽𝗲𝗻𝘀𝗲𝘀- Just be mindful of overall expenses and eliminate unnecessary.

Now if you know your limit to spend and develop an acumen to cut down unnecessary expenses the path to financial freedom would be half smoother.

We will discuss the tricks and tips in detail in upcoming posts.
So 🅚🅔🅔🅟 🅦🅐🅣🅒🅗🅘🅝🅖 this space.....

Gear up and keep watching this space ....
Coming soon.....
The top 10 Tricks to reduce your expenses ....

𝟕❤️𝐄𝐬𝐬𝐞𝐧𝐭𝐢𝐚𝐥𝐬❤️𝐦𝐨𝐧𝐞𝐲❤️𝐦𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭❤️𝐭𝐞𝐜𝐡𝐧𝐢𝐪𝐮𝐞𝐬❤️𝐟𝐨𝐫❤️𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥❤️𝐟𝐫𝐞𝐞𝐝𝐨𝐦:
Being financially free is everybody's dream and it is the by-product of learning the art of money management. A person is considered financially free when his expenses are covered without having to work. His Income and assets should be more than his expenses and liabilities......
Debt management, the ability to save, forecasting probable outcomes, Investing wisely are important characteristics of financial freedom......
Then comes the greatest art of money management, which is discipline. It is all about controlling temptations to buy not needed things and figuring out a way to save prudently and regularly paves a golden path to financial freedom......
After discussing financial freedom characteristics let's learn
7 money management techniques for financial freedom.
𝟏.𝐓𝐫𝐚𝐜𝐤𝐢𝐧𝐠 𝐞𝐯𝐞𝐫𝐲 𝐩𝐞𝐧𝐧𝐲 𝐭𝐡𝐚𝐭 𝐜𝐨𝐦𝐞𝐬 𝐢𝐧 𝐚𝐧𝐝 𝐠𝐨𝐞𝐬 𝐨𝐮𝐭.
Taking account of the amount of money you spend and on what you spent will help you to ascertain whether spending was on right things or wrong things. The amount is money you spend is not exactly the quantity of the money you spend but it is much more than that(will discuss this in a separate column).....
𝟐.𝐁𝐮𝐝𝐠𝐞𝐭𝐢𝐧𝐠:
Budgeting is all about deciding an amount of money kept aside for a particular purpose during a specific period of time. This skill is neglected by most people. Budgeting only works if you stick to the plan......
𝟑.𝐒𝐚𝐯𝐢𝐧𝐠, 𝐭𝐡𝐞 𝐦𝐚𝐬𝐭𝐞𝐫 𝐀𝐫𝐭:
Don't spend all your earnings is the key trick to save. One should lookout to save at least 40% income. It all depends on reducing spending or increasing incomes. Saved income bails us out during contingencies and emergencies.
So learn the art of saving......
𝟒.𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝 𝐭𝐡𝐞 𝐬𝐡𝐨𝐩𝐩𝐢𝐧𝐠 𝐩𝐬𝐲𝐜𝐡𝐨𝐥𝐨𝐠𝐲:
People generally buy things for feel-good factor or to show off it to others. Controlling temptations and buy only when you need them is the critical money skill that everyone should learn......
𝟓. 𝐈𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜𝐚𝐥𝐥𝐲:
To scale up financially and personally one should learn not just how to invest money but also how to invest time in learning new skills and strategies. Compounding is known as the 8th wonder, whether it is time or money you invest will result in enormous growth if it is done strategically......
𝟔. 𝐌𝐚𝐧𝐚𝐠𝐢𝐧𝐠 𝐝𝐞𝐛𝐭 :
For more than a decade I have observed people closely who have failed in making their loan repayment. They go through a lot of turmoil when they miss their loan installments. It will affect their creditworthiness, they forfeit their assets, will pay higher penalties and interest. Budgeting for loan repayment is a crucial skill everyone should learn. How to become debt-free strategically will discuss in detail in another column......
𝟕.𝐍𝐞𝐭𝐰𝐨𝐫𝐤𝐢𝐧𝐠, 𝐬𝐨𝐜𝐢𝐚𝐥 𝐬𝐤𝐢𝐥𝐥:
Money can only be earned by dealing with people. Being approachable, adding value, solving issues of others, learning how to control emotions are essential social skills that will accelerate your money journey. Essential money management skills for financial freedom.