10 deadly sins that keep you poor

1. Using credit cards or debit cards:

The card has become such an important part of our lives we cannot live without it. I have always argued that the card dramatically reduces our need to print notes, etc…however if you wish to reduce your expenses, stop using the card, shift to cash.

2. Emotional Shopping:

Stop and think why you are buying things. Is it because you had a fight? an argument with your boss? time-pass? as entertainment? you have been waiting for a friend and you were supposed to meet in a mall? Or do you really need the things that you are staring at in a shop? Instant gratification is great – so what if it creates debt in the long run?

3. Entitlement shopping:

Amazing how many people think ‘this much is basic’ how can I not travel by air, taxi, auto…or ‘it is my wedding anniversary, I MUST BUY HER a diamond ring’ or ‘sir we just need an iPad’ . Amusing to see kids buying a mobile, car, house, …all on such ‘sir everybody borrows to buy a house’ theory. Entitlement based on dad’s earnings is even funnier to watch.

4. Peer pressure:

where you live, what you buy, where you eat out, what you do – all this is decided by colleagues, classmates, etc. who are actually chasing you. Funny situation is it not? No clue who is chasing whom – seem to be running in circles and wondering where have they reached!

5. Addictions can be expensive:

shopping, tobacco, eating at fancy joints, buying expensive things, alcohol, travel – anything which becomes an obsession or addiction sucks money out of your system, and fast!

6. A victim of the media:

today your entertainment has to be going to a mall, bowling, playing other games, movies or eating out. To imagine that reading a book, carrom, going for a walk, cycling around, etc – those which you can do together but does not cost money have been so beautifully killed as entertainment thoughts! Wow media, you have achieved your goals!

7. Self worth is completely dependent on what you have.

So all ‘show off ‘ assets HAVE to be branded. There is a whole gen out there which has been beautifully told that Brand = Value. Excellent for me as a shareholder of cos. where I am a shareholder…but it is hurting you like mad, wake up!

8. No plan:

no plan of expenditure, career, savings, retirement, …so it hardly matters.

9. No understanding of investment concepts

like start early, compounding, power of small numbers – leading to fatalistic statements like – what will I be able to do saving Rs. 4000 a month? or I will never be able to buy a house in Mumbai, so let me live it up!

10. One more loan won’t matter

I anyway have X amount of student debt, x amount of car debt, y amount of personal debt…so what if I added another small amount

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There is a paradox that exists when you're in your 20s; you have the energy and freedom to do whatever you want, but not necessarily the funds to do so. Often the two sides are at odds with one another, but they don't inevitably have to be. There are a number of ways to exercise your youthful exuberance, whether it be venturing out into the world on your own or pursuing your passions, without hemorrhaging money.

Here are a few tips to survive and thrive in your 20s without breaking the bank.

Live with Roommates

If you attended college and shared a place with peers, why not continue to do so after you enter the workforce? It's a good way to begin the onset of personal budgeting and household running without having to incur the higher prices that come with a single-bedroom residence. Living with roommates will also allow you to build up some experience dealing with financial responsibility and living under the same roof as other people before you dive headfirst into purchasing property with a spouse. Splitting rent with three other people for a place with a single bathroom, or sharing a fridge, may not be the most glamorous of accommodations to have in your 20s, but a few years down the line it will save you money while allowing you to maintain some financial independence.

Rent appliances

Instead of purchasing appliances try to rent appliances so if you have to suddenly move out you have to bear no re-location charges or risk damaged goods in transition.

Invest in a bicycle instead of motorcycle or car

You’ve just landed a job and the motor cycle looks really tempting, but you could save up that money and buy a bicycle instead and work up those muscles. You can always cycle to work if you live close enough or leave it at the metro/train station. This would also save you your gym subscription. The car can wait till you manage to save enough for a decent down payment.

Learn to Cook

Learning how to cook can boost your finances and cut out unnecessary fat, both literally and figuratively. Suppose you spend at least Rs 200 on meals each day of a full week - you're looking at a food budget of 1400 a week, excluding snacks and beverages. For the same amount, you can visit your local grocery store and purchase produce, meats, spices and grains which will yield a wide variety of healthy meals that can last you for more than a week.

Cancel Your Cable TV Subscription

As the generation that heralded in the advent of the Internet, you have to honestly ask yourself: do you truly need to pay Rs 400 a month on cable television? With a basic broadband Internet connection, you can be connected to hours of free media from sites such as YouTube. Why then, coupled with the cost of your Internet connection, would you pay for a cable package that provide dozens of networks that you likely do not watch? There are multiple subscriptions that the average frugal 20-year-old can cut from his or her monthly budget, but given the amount of media available for a fraction of the cost of a basic package, the choice to let go of cable television seems to be the first obvious choice.

Steer clear of credit cards

You’ve only just started earning; do you really want to be in debt just yet? Living without a credit card is a good way to learn to live within your means. You can always create a fund and save up for a few months for the 42 inch plasma TV that you’ve been eyes since college. You’ve waited so far, wait just a little bit longer.

Volunteer With an Organization

Do you like looking at fine art? Attending concerts? Playing with dogs? Look for a business or organization in your area looking for volunteers. You might be surprised at how many of the places you enjoy frequenting will let you volunteer. What these opportunities lack in compensation, they make up for volunteer perks. For instance, some music venues look for ushers and bartenders to work at shows and in return allow volunteers to watch performances for free.

While letting you enjoy your passions at no cost besides your time, volunteering has the added opportunity for you to mingle and meet new people.