Saving money on regular expenses for mutual fund investments
The biggest challenge to achieving financial goals is the inability to save or not saving enough. Many people are not aware of how to take a systematic approach towards goal-based financial planning to accomplish their financial goals. Even if some of them are aware, the biggest challenge for achieving their financial goals is their inability to invest. Either they cannot invest due to lack of savings, or they cannot save as much as required to invest in fulfilling their financial goals. This article will discuss some of the ways of saving money on regular expenses for mutual fund investments to accomplish financial goals.
Saving money from regular expenses
Every month, we all spend money on various expenses such as groceries, daily use of household goods, medicines (if someone is suffering from a chronic illness), fashion, dining out and ordering food, movies, travel, etc. What if we could continue doing these regular expenses but still save some money every month from these expenses? Depending on our expenses, what if we could save Rs. 2,500 – Rs. 10,000 every month from these regular savings and invest them towards our financial goals?
Ways of saving money
Did you know that when you spend money on regular expenses, you can save money through a combination of the below options:
- Direct discount on MRP or BOGO (Buy One, Get One Free) offer by the merchant
- Discount/cashback offers on credit cards/debit cards/wallets
- Additional cashback from 3rd party websites like Cashkaro
- Additional discount by applying coupons offered by the merchant or manufacturer
- Additional discount when the order value is above a certain amount
- Additional discount for members through loyalty programs
- Reward points on credit cards
- Rewards points/gift vouchers on credit card spend based offers
- Rewards points/gift vouchers on credit card milestones etc.
So, that is quite a big list of offers through which you can have a decent amount of savings every month. All you need to do is keep a tab on when these offers are rolled out and accordingly plan your purchases and make the most of these offers. Let us now understand how you can save money in each category of your regular spending.
1. Groceries and daily use household products
Almost all big online (Amazon, Flipkart, BigBasket) and offline merchants (Star Bazaar, Big Bazaar, Reliance Mart) have a sale on groceries, and daily use household products, either in the 1st week or 1st ten days of the month. They offer up to 50% direct discount on MRP and 5-10% discount on various debit/credit cards during this sale. There may be other benefits, as mentioned in the above section.
Various merchants give different names to this monthly sale, such as:
- Amazon Super Value Offer on the 1st – 7th of every month
- Flipkart Super Saver Days on the 1st – 3rd of every month
- Bigbasket 10 Big Days Sale on the 1st – 10th of every month
- Star Bazaar Mega Monthly Shopping usually in the 1st week of every month
You can plan your monthly grocery and daily use household product purchases during the above sale/offers, maximise your savings, and start your mutual fund systematic investment plan (SIP).
2. Garments and fashion
Garments are something that you must be spending on once every few months and not every month. So, you can plan your garment purchases once in every 3-4 months during the following sale events organised by online and offline fashion retailers:
- Republic Day (26th January)
- Labour Day (1st May)
- Independence Day (15th August)
- Diwali (October-November)
If you observe the dates of the above sale events, they are evenly spread out throughout the year, with one big fashion sale every 3-4 months. So, if you plan your garments and other fashion purchases as per the above sale events, you can save a lot of money on your garment purchases.
For the last few years, days like Republic Day and Independence Day have been celebrated like national shopping days as everything is on sale, including fashion, during these days. For fashion lovers, the Myntra EORS (End of Reason Sale) is one of the biggest fashion sales (discounts of up to 75%) to look forward to, which is held around 4 times a year. Apart from online fashion retailers, offline fashion retailers also organise sale events several times a year, offering huge discounts or BOGO (Buy One, Get One Free) offers. All you need to do is plan your fashion purchases and save a lot of money for your mutual fund investments.
3. Dining out and ordering food
These days, many families spend anywhere in the range of Rs. 1,000 – Rs. 10,000 a month on dining out and ordering food at home. If you prefer to dine out, you can buy deal vouchers from a website like www.nearbuy.com or purchase membership of a food dining app like Dineout or EazyDiner, etc. These can help you enjoy discounts of 10-50% or BOGO offers on dining out.
If you prefer to order food at home, you can order through Swiggy or Zomato. They always keep running discount offers. They also have tie-ups with various banks and offer discounts on credit/debit cards from time to time.
If the above methods don’t help you save much money, you may consider skipping a family dinner at a restaurant once a month, which can easily save you Rs. 1,000 a month. You can start your SIP investment with this saved amount and start your journey towards your financial goals.
If you or any family member is suffering from a chronic illness, you have to purchase medicines every month. In that case, you can order medicines online through 1mg or Netmeds. They offer up to a 25% discount on MRP and additional cashback in their wallet. They also have tie-ups with banks and third-party wallets. You get an additional discount/cashback when you pay using specific credit/debit cards or wallets.
1mg has a membership program (1mg Care Plan), and Netmeds also has a membership program (Netmeds First) in which they give extra discounts, free or discounted Doctor consultations. They also have regular sales either in the last week of the month or the first week of the month, wherein they offer additional discounts or other offers.
Offline pharmacies such as Apollo Pharmacy, Medplus, etc. also, offer good discounts.
So, if you plan your regular medicine purchases, you can save a lot of money and use these savings for your SIP to reach your financial goals.
Many bank debit and credit cards offer you Buy One, Get One Free (BOGO) offer movie tickets. You can go for these cards to save money on movie tickets. Some cards also offer you a flat cashback of Rs. 250 or Rs. 500 in a month on the purchase of movie tickets. You can also redeem your credit card reward points for BookMyShow vouchers and use them to purchase movie tickets. Some credit cards also offer you BookMyShow vouchers for reaching milestone spends.
So, you should consider the above-mentioned debit/credit cards for movie tickets rather than spending money from your pocket. The money saved in the process can be used for making investments in SIPs.
6. Travel – Flight tickets and hotel accommodation
For travel, you can book flight tickets and hotel accommodation through online travel agencies (OTAs) like MakeMyTrip, Cleartrip, Yatra, etc. They always have various discounts/cashback offers running through various bank debit/credit cards. Airlines and hotels also announce sale offers from time to time wherein they offer flight tickets and hotel booking at deep discounts. Keep an eye on such offers and avail them whenever they are available.
Many hotel chains have membership programs that offer various benefits in the form of discounts, free nights, etc. You can also use your credit card reward points to book flight tickets and hotel accommodation. Thus you can save money on travel and redirect the savings for investing towards your financial goals.
7. Electronics and consumer durables
Electronics, mobiles, and consumer durables are things you may buy once or twice a year. To buy these, you can look forward to big sales events like Amazon Prime Day (in July/August every year) or Flipkart Big Billion Days (Diwali), or Amazon Great Indian Festival (Diwali). You can also buy electronics and consumer durables at a deep discount during Republic Day Sale or Independence Day Sale. You can save a lot of money on electronics and consumer durables during these sale events.
Investing savings into mutual fund SIPs
If you combine the savings from all the categories mentioned above, you can save anywhere in the range of Rs. 2,500 – Rs. 10,000 per month, depending on your monthly expenses. When you invest these savings in mutual fund SIPs over a long period of time, you can create substantial wealth to accomplish your financial goals.
Wealth creation through mutual fund SIPs
|Investment time horizon|
|10 Years||15 Years||20 Years||25 Years||30 Years|
|₹ 2,500||₹ 5,89,637||₹ 12,52,598||₹ 24,20,962||₹ 44,80,018||₹ 81,08,778|
|₹ 5,000||₹ 11,79,275||₹ 25,05,197||₹ 48,41,924||₹ 89,60,036||₹ 1,62,17,556|
|₹ 7,500||₹ 17,68,912||₹ 37,57,795||₹ 72,62,886||₹ 1,34,40,054||₹ 2,43,26,335|
|₹ 10,000||₹ 23,58,550||₹ 50,10,394||₹ 96,83,848||₹ 1,79,20,072||₹ 3,24,35,113|
Note: In the above table, annual investment of Rs. 30,000 (monthly Rs. 2,500), Rs. 60,000 (monthly Rs. 5,000), Rs. 90,000 (monthly 7,500), and Rs. 1,20,000 (Rs. 10,000) has been considered. The return assumed is 12% CAGR.
As seen in the above table, if you save Rs. 5,000/month from your regular expenses and invest it in a mutual fund SIP that gives a 12% CAGR, then you will have a corpus of Rs. 1.62 crores in 30 years. Similarly, if you save Rs. 10,000 from your regular expenses and invest it in a mutual fund SIP that gives a 12% CAGR, then you will have a corpus of Rs. 3.24 crores in 30 years. The amount can take care of some of your financial goals.
Investing in mutual funds with Glide Invest App
You can start your investment journey with the Glide Invest App. You can select from pre-defined financial goals like child education planning or retirement planning or define your own financial goals. Based on your risk profile, you will get the recommendations for the appropriate mutual fund schemes. You will get advice on how to plan and systematically invest towards your financial goals.
With Glide Invest, you will get guidance for:
- A personalised risk profile assessment
- Identifying your financial goals
- Appropriate asset allocation
- Making a financial plan for each goal
- Automating the financial plan
- Review and analysis of your financial plan
- Hand holding you till your financial goals are achieved