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Penny-pinching ideas that can work for you

LiveMint logoLiveMint 06-09-2017 Sabari Saran

We often exceed our household expenditure budget. And as the month ends, we are left wishing that our money would have lasted just a little bit more. You have heard various people’s take on ‘pound foolish penny wise’ approaches. Fact is, especially in today’s age of gadgets and technology, penny pinching can help you save quite a few pounds—much more than what was ever possible in the past. Watching every last paisa out of your pocket is no longer just about curtailing your desires and lifestyle. You can have it all, and still save a bunch every month with these five penny-pinching ideas.

Most retail and grocery stores offer coupons to their customers. These coupons give deals on future purchases, with offers such as ‘buy one get one ’ on select products and even cash discounts. If used smartly, these vouchers help you save extra money. It is a good practice to organise all these coupons in one place, so you don’t have to go on a treasure hunt before grocery shopping. Remember that most of these vouchers have an expiry date. You can plan your shopping to make the best of these offers.

These days various e-commerce and retail chains also offer online coupons, promo codes and discounts when you buy things like clothes, food, air tickets, and even mobile recharges. Apart from websites of the retailers, you can also find these offers at discount coupon portals like couponraja.in, couponzguru.com, coupondunia.in and grabon.in. Not all these websites have the same offers, so browse a few before you pick the shopping bag.

Most banks and mobile wallets have cashback offers on online purchases. These offers can be from banks (for credit and debit cards) or e-wallet companies. In these offers, you don’t get upfront discounts. A certain percentage of your billed amount—which can be as high as 50% of your bill (and even 100% for ‘lucky’ users)—gets added to your card or e-wallet upon completion of the transaction. This cashback can be used to reduce your next shopping bill.

Most e-commerce portals tie-up with different banks and e-wallet companies. On the same website, different banks or e-wallets can have different discounts or cashbacks. Of course, different portals could have different offers too. So spend a few minutes to compare the offers, to know which e-wallet or bank card to use, before heading to the payment gateway. For example, Bookmyshow, an online ticketing website, offers cashback of up to Rs150 if you book from Mobikwik e-wallet and Rs75 if you book through HDFC Bank Ltd’s Payzapp e-wallet. These offers can change anytime and are for limited periods only. Always check that the offer is still valid, before any online transaction.

There are so many e-commerce websites that you can’t really be sure that another is not offering a better deal. Going through each site may not be possible for most buyers. This is where price comparison websites come in. These websites get the price feeds from many shopping portals and show them to you in one place.

These websites give an overview of the product, its specifications and user reviews too. They let you compare prices from many e-retailers such Flipkart, Amazon, Tata Cliq, eBay, and Paytm. Some portals also show price movement graph for various products, to help you see how prices were in different months.

Some price comparison websites are: pricedekho.com, compareraja.in, and mysmartprice.com. But remember these sites only track data from e-commerce portals and not the neighbourhood brick and mortar shops. Thus, for big purchases, it is a good idea to check the prices in these stores too.

It may not be wise to get loyalty cards of every retail store you go to. However, if you visit a store more than the others, it could make sense to have its membership card. The store usually adds points to your card every time you shop with it. When accumulated, these points can be redeemed later while shopping. These memberships, apart from offering reward points, also offer special discounts on birthdays and anniversaries, and inform the customers of exclusive offers and members-only sales. However, some stores charge membership fees and in some case the accumulated points expire after a time. Analyse all this before buying a store membership card.

Our eyes beam with joy the moment we see the four-letter word ‘SALE’ splashed across banners in online and offline stores. However, to make the most of these sales, you need to plan your shopping in advance, and organise your wish-list cart as well. If you know what you want, you can better track its price and go for it the moment its price reaches your target price. Most brands go for end of season sales, in which the price of older collections can be cut by 60% or more. You can plan for these sales as they follow the same calendar every year.

Not just brands, e-commerce portals also organise these annual events. Track the retail stores and websites you regularly visit to make big purchases, and know when their products usually go on sale. For example, most retail stores have festive sales around Diwali. For example: Flipkart and Myntra have ‘Big Billion Day’ sale and Amazon has ‘Prime day’. Big Bazaar, a hypermarket chain, has the weekly ‘Wednesday bazaar, Hafte ka sabse sasta din’ sale for grocery items. These are all events you can plan for and save more.

According to Uttam Kumar Sen, a certified financial planner, everybody should penny-pinch as it helps oneself to understand the worth of each penny and develop a sense of responsibility. “If you want to earn 8% interest to get Re1, you will have to invest Rs12.50 for 1 year. However, we do not think about this before spending that Re1. We need to understand the value of money,” said Sen.

However, Melvin Joseph, founder, FinVin Financial Planners and a Registered Investment Adviser, said that one should do a cost-benefit analysis before deciding if it is really worth spending that much time on penny-pinching. “The value of time varies between a chief executive officer drawing a salary of Rs50 lakh a year and an entry level employee earning Rs5 lakh annually. While the latter can spend hours to research on the lowest-cost options, the former might find it better to shop from reputed brands without much analysis. While everybody can penny-pinch, it may not be worth it for all,” observes Joseph.

Penny-pinching requires you to be financially disciplined and needs you to religiously track all the methods adopted. “Effective cash flow management helps to control reckless spending. You need to make sure that your savings get channelized to goal-based investments. One can easily save 1-5% of total expenditures by deploying all methods smartly,” said Sen. Remember that penny-pinching is not a one-day exercise. It requires you to be smart and tech-savvy and can be a little time consuming at times. So, do it only if you see value in saving every penny and if it suits your lifestyle.

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