Wednesday, December 28, 2011

Cutting the fat #2011

And another year has come and almost gone. Last year I wrote about how we were trying to look at our monthly budget to cut out some unnecessary costs, so that we could save the money that currently gets spent on stuff that we derive no value from. This exercise is really simple... in theory. Its easy to identify expenses that are wasteful, but its the consistent practice of avoiding impulse buys that's hard. We had our ups and downs this year, but we tried hard. Here are some of the major wins we had this year.

The mortgage. Sometimes all you have to do is ask. We thought the interest rate we were paying on our home loan was a tad high, so we negotiated with the bank and they were happy to reduce the coupon. This brought our monthly installment payment down by $70 each month. Easy peasy.
Annual savings: $850

Using the library. I have a bad habit of splurging on books and DVDs/CDs, and this year the very well stocked National Library helped save me a pile of cash. While I did lose the book shop battle for a bit in Kolkata earlier this year, thankfully the damages weren't that great. The library is a wonderful place to explore and spend time in. I don't really need to own the books I read, so using the library helps save storage space at home as well as a fair bit of money. What about music and films you ask? No problemo, the library has a fantastic audio/video collection as well.
Annual savings: $550

Restructuring the insurance plan. I realized we were paying too much on insurance for too little coverage. So we went to another provider and got a much cheaper plan. And we cancelled existing endowment plans and went only for term plans, thereby increasing our coverage at a much lower cost.
Annual savings: $600

Theres plenty more we can do and the efforts are always on. So here's to another frugal year ahead in 2012. Before I end, a word on our giving this year. Fortunately we were able to give more to charity this year as compared to the year before. Over and above the monthly charity deductions from salary, we hopefully made a bit of a difference to the lives of the many street kids in Kolkata as well as to those of some financially needy students in Singapore. Hope we can keep helping more and more with each passing year.


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