12/06/2017 12:26 PM IST | Updated 12/06/2017 12:31 PM IST

How To Plug Small, Everyday Financial Leaks That Hurt You In The Long Run

sunil menon

"Beware of little expenses. A small leak will sink a great ship." - Benjamin Franklin

Whenever we make a resolution to spend wisely, we generally focus on the big things: dresses, gadgets, cars, etc. Smaller expenses go under the radar. However, these small expenses can insidiously drain your wallet dry over time. So the next time you pull out your wallet for that cup of Americano at a fancy coffee shop, consider that plain old black coffee tastes roughly the same, whether it's priced at Rs.30 or Rs.300.

Here are some other, everyday leaks that end up hurting our finances more than we realise.

Baldur Tryggvason

1. Overpaying for mobile talk-time/data – Many of us have Wi-Fi Internet at home or at the office. Hence, overpaying your cellular network operator for a data pack that might not be fully utilised is just a sheer waste of money. The same goes for talk-time too. Instead of topping up your pre-paid card every few days, look for a recharge scheme that allows unlimited local/national calling.

2. Booking a regular cab instead of a shared cab – Cab aggregators have made life so much easier for those who hate to take public buses or trains. But just because a facility is convenient doesn't mean you spend more than half your salary on it, right? A regular cab is an expensive affair when compared to its cheaper cousin, the shared cab. A shared cab will not only reduce your travel cost by half, but will also help you meet and interact with new people. Talk about a win-win!

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3. Paying the minimum amount on your credit cardbill – This is one of the worst ways to drain your resources. When you pay just the minimum amount due on your card, you are in effect only paying the interest on a certain sum. Your principal amount stands intact, and the following month, additional interest, on both the previous and current bill amount, is charged. That basically means that you pay double interest. So if you can't pay the entire bill amount at one go, always pay more than the minimum amount, so that the interest that's charged to you in the following month is reduced.

4. Impulse shopping – When shopping impulsively, we end up buying things we don't necessarily need. Instead of giving in to your impulse, wait for an online discount or end-of-season sale, or save up to buy something specific. Your bank account will thank you for it.

5. Cigarettes — If you needed another reason to quit smoking, this is it. A single cigarette today costs between 12 and 15 rupees, so do the math. In addition, you need to stock up on cases, lighters, mints and perfumes to keep away the offensive smell. Aren't you really better off without this habit?

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6. DTH connections – A lot of people today have two televisions (and two DTH connections), besides subscriptions to online streaming services like Netflix or Amazon Prime. And then there are free online video sites which have pretty much everything you'd need. Do you really need so much entertainment? Why not prioritise?

7. Gym membership – Working out is not cheap these days. A membership to a decent gym easily costs upwards of Rs.25,000 a year—and way more, if you've hired a personal trainer. Now, this is one expense that is totally worth it, IF you do justice to it. But we all know the truth.

Every rupee you save is a step you take towards financial discipline. And mutual funds make it easier for you to make the most of your small savings. Did you know, that sums as low as Rs.500 a month can be used to start a mutual fund SIP? Start investing in mutual funds today to secure your tomorrow. To know more, check out the recent 'Mutual Funds Sahi Hai' campaign by The Association of Mutual Funds in India (AMFI) at www.mutualfundssahihai.com

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.