1 Deceptively Simple Rule to save more

What is the most popular advice that you receive about money?

My vote is on Spend less, Save more!

It is one advice that my parents always told me. After all, “money does not grow on trees“.

It was drilled down to a point that whenever I spent money on a new phone or that coffee in the Star Cafe, a little guilt feeling would raise its head.

How do you spend less?

I am so afraid to start a discussion on this topic. The suggestions that I have received range from the funny to the ridiculous. Sample these.

  • Use public transport
  • Don’t eat out or eat ‘wada paav‘ if you have to 🙁
  • Buy cheaper stuff (however, useless it might be)
  • Stop buying the newspaper
  • Sell the car
  • Shift into a smaller house
  • Use a basic feature phone (what, really!)

You hit a red spot with your finances and there will be all this advice pouring in from all quarters.

It doesn’t work

Let’s accept that ‘spend less, save more‘ is the most basic money management advice that any sensible person would give to you.

But you know what

Spend less, save more;

Doesn’t work, anymore.

(Forgive my attempt at that rhyming)

Taking my own example, I have my few but very strong interests and hence related expenses too. Actually I call them experiences because they reflect what I am as a person. And I would never give up on them.

  • I love driving my own car so I don’t use public transport too often. Add that to the petrol bills.
  • I love food and I would try a new restaurant. Yes, they bill in 4 figures.
  • I also love my gadgets. As I started on my own, I bought a new MacBook Air for my work. Its awesome and it comes at a worthy price.
  • I recently upgraded my TV to an LED one.
  • And yes, I am eyeing that new phone too.

You may say that all this is not such a big deal. Honestly, that is not the issue. The real issue is that my savings don’t keep pace with my experiences (my spends, that’s how I put it).

And I don’t want to feel guilty about my experiences. I want to thoroughly enjoy them.

I would agree though that I end up spending more than I should. I agree that I should be saving more.

Now, what can be done to ensure that while I enjoy my experiences, guilt free, I am also able to save more? Sounds like a complex riddle.

I grappled with this puzzle for a few weeks before the light bulbs in my head turned on. The idea looks very simple and that’s where lies it true power.

Do you feel we are in the same boat? Then, here’s what I have to recommend.

1 Simple Rule to Spend Guilt Free and Save More, at the same time

Sounds like the magic potion. It is sort of. This is how you can do it.

Every time you Spend, Save an equal amount of money.

That’s it. Didn’t I tell you it was so deceptively simple? 🙂

Save more, spend less

Let me put this into perspective. See, we are not talking about the spends that are basic needs – food, clothing, shelter. What I am referring here is to those spends that are discretionary, that is, over and above these basic needs.

So, if the next 4G phone worth Rs. 15,000 is on your mind, please go ahead and buy it. Only now you also have to save an extra Rs. 15,000.   

Planning a foreign vacation costing Rs. 2 lacs, add to your investments an equal amount.

Buying a new TV, well, you know what you have to do. 🙂 

As far as possible, save the amount at the same time you plan to spend. That’s how the rule will be most effective.

However, in case of larger spends, you will have to save more and put the money back into your account over a period of time. For example, when you buy a car, you could match it up every month with the EMI that you pay.

And all these savings should go into a separate bank account – preferably the one that drives your investments.

The hidden benefits

And there are quite a few.

The biggest benefit is that now you can fully enjoy whatever you spend your money on, without any guilt. Go to the dance party, a luxury holiday, the new fancy phone or the brand new Pro tablet. No more buyers’ remorse for you.

Second, this habit will help you get much better control on your mind. You will go into a mode where you will pause before you make any discretionary spend.

You will evaluate carefully where is the money going – will it create a meaningful experience or is it just a temporary urge that you want to satisfy?

Finally, you have unknowingly set yourself up for financial freedom. As this habit becomes a part of you, you will have not only rationalised your spends but also accumulated much more in your savings.

Once the money worries are set aside, you will have more time to do things that you really want to do – be it world travel, your creative pursuits or just making the world a better place. This further results in better health and greater peace of mind.

So, yes spend as much as you want, provided that you save that much too.  Make this your money mantra.

Pro tip: Make a friend or colleague a partner to help you practice. Let them know what you are upto and they should hold you accountable towards your progress.


Between you and me: How do you plan to implement this rule? Will you join me in practicing this habit? Let’s do it together. Make a note in the comments or shoot an email. I keenly look forward.

6 thoughts on “1 Deceptively Simple Rule to save more”

  1. My tricks:

    – Ask yourself before buying anything if it’s really going to make you happier. Many purchases are made because we fool ourselves into thinking we’ll be happier with something, or that it will enhance our quality of life in some way, or we are fooled by advertising. You’ll be shocked to hear that since I switched to Axe deodorant, I’m not being besieged by girls whenever I step out of my house.

    – Do some anti-advertising: companies manipulate us 24×7, so I’ve found it useful to do the opposite mentally. When I see an ad for an iPhone that says, “Exquisitely crafted” I tell myself, “Exquisitely priced. And it has poor battery life, poor cellular connectivity and is slippery.” Or when I see yummy cake in a shop, I think, “I wonder how much fat and sugar is in that cake”. When I see a sign screaming that a 5k product has been discounted to 4k, I think, “Ha! It’s probably worth only 3K to begin with, which is why they’re selling it at 4k”.

    – Have your own judgement of how much a product is worth. Don’t just go by companies’. I bought an iPhone for 52k a few years back and when I saw the iPhone 6s Plus launched for some 82, I told myself that I’ll pay no more than the max I ever paid for a phone, which is 52k. Apple didn’t sell one to me at that price, so I didn’t buy one. As another example, I think a BMW is worth no more than 10 lac, not 30-40, having ridden in a friend’s. So I didn’t buy one, though it’s the ultimate status symbol.

    – Don’t participate in zero-sum games, like trying to make people go “ooh” and “aah”. You don’t get that by buying what everyone has. You have to one-up them. And everyone can’t win at this game. Most lose. Don’t be one of them. The only way to win this game is not to play. And to counter the temptation, when I see someone in a BMW, I sometimes tell myself, “Here’s someone who’s been successfully manipulated!”.

    – When I buy something, like a belt or a shoe, I start with the cheapest model and work my way up, rather than starting at the middle as many people do. I often find that the cheaper one works just fine. When I went to buy a belt, I was repulsed by 1000-rupee belts. Why does a belt need to be so costly? I deliberately asked loudly, “Do you have a cheaper belt?” Some people turned to look at me, but I try to make it a point of pride to use my money wisely. I remind myself that paying more only if you get a better product is nothing to be embarrassed about. To counter the other shoppers’ disapproval, I thought to myself, “Ha! Dumb guys don’t even know why they are paying a certain amount for a product!”

    These are some tricks I use to counter the effects of advertising and society.

  2. Brilliantoo- an antidote to impulsive buying
    The world today has a powerful marketing engine which only wants us to spend impulsively, it would be great to have an antidote as Vipin is suggesting.

  3. Looks like good idea at first… However stingies like me (who otherwise splurge unthinkingly!) would feel even more guilty thinking that I spent 2 lacs on foreign vacation even though I was able to save another 2 lacs. My knee-jerk reaction would be “I could have saved at least 1.5L more by going for local vacation instead of foregin”! 🙂 So, I think like many other things, attitude to money and “experiences” is what matters – and almost no one is ever satisfied with their ratio and keep juggling it – just MHO.

    • Absolutely Raman. Everyone has their thumb rules, so to say, of dealing with money. Also, I don’t think you should call yourself stingy. I would call you Smart. 🙂 All the best! Keep reading.

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