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Six Tried And Tested ‘Golden Rules’ On How To Reduce Your Expenses

Posted: November 4, 2019

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Everyone wants to know a shortcut to either save money or cut down on expenses. While there is no shortcut, here are six ways you can reduce your expenses!

We all want to know the secret on how to reduce on expenses. To find out if there is any secret short cut formula that might help. (Sigh).

It may not be the shortcut route, but I can definitely share a little secret on the art of reducing expenses. The very existence of this post is based on the personal experience of being unable to reduce expenses, or rather, to be unable to control expenses and end up with no savings! 

However fortunately, I lucky enough to realise it off-late and yes, succeed in what I once thought would be impossible- to cut down the expenses.

Though there are no pre-defined ways of doing so, these few tips could help you create your own secret formula to reduce expenses. I call mine, the Golden Rules. 

Make your own piggy bank

To start with- make your own piggy bank. Like, as kids, we used to have a piggy bank to save our coins and money. Everyday, fill your piggy bank with a minimum of 1/4th of your daily pocket expenses. 

It may sound childish but it can be a good start towards beginning savings. Get used to cutting your daily pocket money and add it to the piggy bank.

A day when your piggy bank becomes full, you will be astonished to realise that you have actually reduced your expenses. It doesn’t matter if it was marginal. This is your first achievement and your first secret to save. 

Moving further, let’s start investing. This is the rule no.2.

Make short term investments

Now that you are confident enough with your little savings, take the next baby step to start investing. Start with short term investment plants. If you wish to go risk free and maintain liquidity as well, either open fixed deposits with a bank, or open recurring deposits with a bank.

You can also take a Mediclaim- a medical cover for yourself and your family. This will protect you in case of medical emergencies without making heavy cuts to your pocket. 

While you are investing, be sure to investing in something that gets you returns policies and plans. Do not fall prey to any company’s ponzi schemes. Try and avoid investing in such schemes that may lure you with sky-high returns on your investments and take your money. Such returns do not exist in any market. 

Now that you know that, take your decisions carefully and invest wisely. 

Make long term investment

By now you understand the importance of savings and have learnt the art of reducing your expenses. So why not make long term investments that will benefit you in long run?

Get a life insurance policy

Cover yourself and your loved ones with benefits of insurance cover. There are various plans available. Choose to, either, pay in lump sum or pay monthly, quarterly or yearly premiums.

Select the policy that bests suits you. You may select to get the policy returns on maturity or can simply opt for a money back policy.

Open PPF account

Open a PPF- (Public Provident Fund) account. Make monthly savings to your PPF account. The best part on PPF returns is that it is tax-free on maturity. You also get tax benefit under section 80C for the investments you make in PPF every year.

Make investments in Mutual Funds & SIPs

When it comes to mutual fund you earn in two possible ways:

  1. In the form of distribution – A mutual fund pays off nearly all the amount of net income- the dividend income earned on stocks and interest income earned on bonds, that it receives over the year.
  2. Capital gain– an increase in the amount of securities.

With the help of SIPs i.e. the Systematic Investment Plan you can invest small amounts in mutual funds periodically instead of lump sum amount.

Invest In Stock Market

Strictly, do not trade, only make long term investment. Trading is a habit like gambling, one that you can’t get rid of easily unless you lose the entire amount in an investment you have made.

So strictly stay away from day to day trading. Long term investment in stocks can get you capital gain.

Government pension scheme

Start making provisions for your retirement by investing in pension scheme. Atal Pension Yojana by government is one such scheme.

You need not visit bank or government office for this, if you are using online banking or App you can activate the same with a single click.

Investment in assets

When you evaluate all the investment options, you will realise the need to make investments in assets like gold, car, property– a house or land. 

“How does investment in assets help reduce expenses? On the contrary doesn’t it increase the expenses?” is the common dilemma.

Most of the assets such as car and the property are taken on loans from banks and NBFCs. Therefore, you think that the EMI is an increased expense.

Rather than increasing your expenses, it converts those into savings of assets. Now this means that it basically reduces your existing expenses and diverts them to help you make fruitful investments to get returns. 

Now here is a list of all the things you can invest in:

i) Gold – You can make monthly investment in gold bonds or monthly gold schemes to purchase jewellery, ornaments, coins, etc.

ii) Car – Car is a status symbol. You can go for a car loan with any bank to purchase your dream car.

iii) Property – You can chase your dream to purchase your dream house with the help of home loan. If possible apply for loan before you turn 30, it helps you get longer repayment tenure home loan upto 30 years. This helps you reduce the monthly EMI.


This is how I turned my expenses upside down and I hope these will help you do the same as well. 

Remember to start saving as early as possible, so that you get maximum returns over a period of time.

To summarise a sensible decision of savings is the only answer to “How to reduce expenses?”

Picture credits: Pexels

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Ushali Mishra - founder of Loanfasttrack - Mumbai based company- specializing into loan industry and offering a

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