Do you fall for these spending traps? Question of Money by Aarati Krishnan

We’ve been doing many videos about saving 15% of your pay and investing it in FDs, mutual funds, NPS etc. But we had some viewers telling us- “Wait! You are assuming I can save every month. What if I can’t? I’m a shopaholic and end up spending all my money.”  Well, we get your problem because shopping can be an addiction, a little like smoking or drinking. There are folks who shop just to cheer themselves up when they’re feeling down. Here are some tips to cut back on that habit and to save more.    

Save before you spend 

No matter what your salary, set aside 15% of it at the very beginning of the month, towards investments. This will help you save before you spend. You can set up auto debits for bank recurring deposits or SIPs in equity or debt mutual funds. Setting these, the day after your pay lands in your account, can be a good way to ensure that you have compulsory savings. Start with 15% and try to raise your monthly investment amount by say 5% or 10% every year.  

Take stock of your investments

 Shopping gives you a dopamine hit because you get something tangible from your shopping sprees. You can admire the wonderful co-ord set or Futon you bought after you buy it. Checking on the balance in your investment accounts can give you the same dopamine hit. Many hard-core shopping addicts turn into investment addicts once they are able to see how much wealth they have created over time, with a small investment. I have had young people share excited screenshots of their MF account statements when they got to their first Rs 10 lakh in their Groww or Kuvera accounts.  Accumulated wealth gives you a sense of security and power far more long-lasting than your dopamine hits from a new dress or Futon.

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Censor your peer group, social media 

In this age of social media shares, the spending habits of your friends, colleagues can have a big influence on your own spending patterns. If the people you hang out with think nothing of blowing Rs 20,000 on a Saturday night-out, it may be hard for you to stay off similar spends.  Therefore, if you are keen to curb your spending habit, you may need to ensure that the people you hang out with, are like-minded about saving and investing money. If your current peer-group is made up of folks who splurge, try to become a part of groups interested in a minimalistic lifestyle. A young colleague was recently telling me about how Instagram has dramatically changed what she aspires for, and her spending habits. Trying to keep up with influencers can be the quickest way to empty your account.  

When following social media celebrities, it pays to remind yourself that they are advertisers and not trend-setters. When an influencer or celebrity sports a 25k handbag or a 40k sneaker on Instagram, they likely got it for free from the brand they are plugging. Consumer brands today think nothing of paying influencers Rs 15-25 lakh for a single Instagram reel or Youtube video plugging their product.  If you can’t resist FOMO, censor your feed and ruthlessly unfollow fashion icons and lifestyle influencers. I’ve personally found that deleting shopping apps from my phone and turning off their notifications, keeps temptation away.   

Spring-clean and return 

 The most wasteful thing about being a shopaholic is that you often do it in haste and repent at leisure – like marriage!  Ever found that you don’t really like the super-expensive shoe or dress that you loved at first sight in the store? Marketers have a term for this, ie, Buyer’s remorse. Buyer’s remorse often makes us not use the expensive items we acquire.  

One way to avoid buying unnecessary stuff, is to never make your purchase on your first visit to a store or shopping site. Of late, when I really like an outfit or furniture online, I put it in the cart immediately but delay the checkout. On checking back a few days later, I often find I no longer need the stuff and can safely ditch it! Cultivating the habit of spring cleaning your home or wardrobe once in 3 months can cure you of wasteful shopping too. It makes you realise how much of the stuff you buy you don’t use.  One good thing with online shopping is the friendly exchange policies. Make a habit of unpacking and returning your purchases as soon you receive them if you have buyer’s remorse. That can give you the joy of shopping while saving you money too.  

Use cash for small payments 

Yes, it is not good for Digital India and all that! But for psychological reasons, parting with hard cash from your wallet is far more difficult than clicking on Gpay or Phonepe. If you take to spending physical cash on your cab trips, groceries, Swiggy and Zomato orders etc, you may find yourself cutting back automatically on these spends.  

If you are disciplined with your credit card payments and pay your full dues every month, use your credit cards instead of UPI. That will help you keep track of your overall spends and alert you when you go over the top shopping. If you have an affinity for one kind of shopping – say ordering food, pubbing, shopping for clothes – put that spend on your credit card so that you can track and check that expense.   

If you are a spender on big-ticket purchases, make a personal rule to match every big-ticket purchase with an investment in an FD or mutual fund. That can have the desirable effect of either cutting your spending by half or making you invest more. You win either way.  

( Host: Aarati Krishnan, Producer: Anjana PV, Edits: Darshan Sanghvi, Camera: Bijoy Ghosh)