Having analysed my expenses for last 3 years this is my spending pattern:
36% - Parents and kids 32% - Monthly expences - rent, elec, water, maid, cable, LPG, etc. 7% - Food 5% - Health 5% - Telephone 4% - Non food consumption items, eg. Toiletries, detergent, repairs 4% - Transport (Petrol and service) 4% - Entertainment - Movies, Dinning out, magazines 3% - Exception expenses, cloth, appliances, travel
Looking at the above I see that the first two categories constitute 68% of my expense and there is nothing I can do to reduce it.
Possible areas for reduction are:
Telephone can be cut by 60% - 70%. Entertainment can be cut by 10 - 25%
No scope for reducing the other expenses. But reengineering our life can help, like - relocate near office, Shift office or school so that both can be close to house, Stay together with parents and children, Radically change children's mindset early so that we do not incur costly higher education expenses later,...
But a smarter way is to find and increase our income. Like - See if we have invested properly, reduce idle money in SB account -shift them to FD/Equity etc, Look for second source of income - side business, tutions, Wife/Parents/Children also work - partime to generate income, Invest in yourself to increase future income - specilize, do post graduation, MBA, Sell off assets which are not needed - Sell off the unused furniture, antique utensils.
RE:Saving potential
by Neeraj Kumar on Apr 11, 2008 02:54 PM Permalink
you can still work on that 32%, ask the maid to leave and do the job yourself, cut on electricity, go on a power saving mode,
RE:Saving potential
by Ravi on Apr 11, 2008 02:56 PM Permalink
Sell off the family silver/gold - Some of my relatives have more than 70% savings in this category. Ideally we should not keep more than 20% in this asset class. We should make our money work for itself, It should keep growing if not for anything else - just to beat the inflation.
