FINE ADVICE

Ever thought why your shirt pocket is on the left side? That’s the side where your heart is! Take care of your money like your heart…….

The world is full of people who have an uncanny knack of generating ideas to lay their hands on our money. Often we become victims of such schemes and our money soon becomes their money.

It is quite hard to earn money and even harder to hold on to it. Once money is gone, it is gone for good! This is why we need to be careful before spending our hard earned money. What we earn isn’t important. It's what we save that counts.

If we are earning Rs. 12 lac a year but are spending Rs. 15 lac during the same period, we can never be millionaires. We will always be broke! There are several stories about people who have earned a lot but who lost it all simply because they didn't know how to hang on to their money.

We lose money due to several reasons:

·         Companies produce several advertisements whose sole aim is to move money out of our pockets into theirs. Car ads that boast of incredible mileage, companies that offer ‘freebies’ to consumers, ads that dismiss rival brands by putting out unscientific research studies, tutorial classes that make dodgy claims of ‘best faculty’ and ‘most successful’ students, detergent brands that claim to remove all sorts of stains without an authentic study to support them are classic examples. The Maharashtra Food & Drug Administration has taken Heinz India to court over an advertisement for its health drink Complan. The advertisement claims the drink can add two inches to a child's height. The FDA charge sheet calls it an exaggerated advertisement.

·        Peer pressure makes us think that we must have certain things or live in a certain way to be seen as “successful”. This leads us to buy things we don't need with money we don't have to impress people we don't like.

·         Modern day advertisements are quite smart. Usually what they don't say is more important than what they do say. Often we see a product advertised as "buy one, get one free". Great deal, right? Once we take a closer look we will find out that the deal is a losing proposition. If a product actually costs one thousand rupees, and we can buy two for three thousand rupees on a "buy one, get one free" offer, we are actually paying a thousand rupees more than we would pay otherwise for the same thing. In fact advertisements are like bikinis. What they reveal is suggestive, but what they conceal is vital. Sometimes such deals could be good but we need to check to avoid losing our money.

·         This is just one example of thousands of advertising gimmicks companies come up with to get more money out of our pockets. A bag of chips appears to be the same size and same price as before, but the bag is only 3/4 full so we are getting less for our money.

·         Quite often one sees statements on food labels such as, 'helps maintain a healthy heart', or 'helps aid digestion’; or on cosmetic products such as, ‘removes wrinkles’, ‘100% protection against sun’; these are some examples of health claims that we need to be careful about before spending our money on them.

·         Claims that a supplement allows us to eat all we want and lose weight effortlessly are false.

Thankfully there are ways to protect ourselves from losing money to such schemes. The first thing we can do to protect against various types of consumer fraud is to be alert. We must believe that money is always better in our pocket than in somebody else's. Once we believe in this we will be more cautious.

Here are some tips:

·         There is always some new mobile, a new music system, a car just launched, or new fashion clothes that a brand may be offering. We may want these items, but we should think whether we really need them. Most of these are items that are good to have rather than need to have. If we stick to the basics, and think before we buy, we are more likely to save money.

·         We should do our homework. It usually takes less than an hour of internet time to compare product costs and find out where we can get the best deal.

·         We must pay cash if possible. We must avoid using the credit card unless we are certain that we can pay off the bill at the end of the month. Otherwise interest charges could end up being more than the cost of the product we originally purchased. If we can’t afford to pay cash, we should not buy. It’s better to save and then buy.

·         Every company wants us to believe that their product is the best, or that by not buying their product, we are missing out on something great. We should just ignore the advertisements. We should buy what we need, when we need it and not let businesses manipulate us into spending too much, buying the wrong product, or buying too soon.

·         We must beware of advertisements that talk about limited availability, advance payment requirements and promises of no-risk "money-back guarantees." For example: "Hurry. This offer will not last. Send us a cheque now to book your product." We just should ignore such products.

·         Negotiate. The price we see is not always the price we should pay, even in a retail store setting. It is the Maximum Retail Price (MRP). Businesses want to sell their products and often will lower the price significantly if they think it will make or break the deal. We should not be afraid to ask! Remember the great Tata Sky Advertisement telling us 'Poochne Mein Kya Jaata Hai'.

Now that we understand that things are not always what they seem to be, we have a better picture of the world of money in general. By paying attention to the examples and tips in this article, we will be able to keep more money in our pocket while still enjoying the things in life that are important to us.