One of the things I haven’t touched upon in a while here is thrift and credit card debt.

As the year comes to a close I thought I will do a post on credit card debt and interest on credit cards because I think I’m fairly close to a year in which I pay zero credit card interest.

Last year I paid a nominal amount because I forgot one payment, and the year before last I paid a small amount for the same reason as well.

Paying no interest on credit cards is a really important thing for me and I even listed down getting out of credit card debt as one of the important things to do before you start investing.

To most people, this is because credit card debt brings very high interest with it and that is money down the drain, and while that is a big reason, it’s not the biggest reason by a stretch.

The big reason for me is all the wasteful spending that you are likely doing if you run up credit card bills. When I look at my own bills they are mainly travel, groceries and eating out, and there are several ways that I can and I have reduced them in the past.

This point becomes especially important for people who are fresh out of college and have started earning recently without much financial responsibility to worry about.

Once you get into the habit of spending a “little bit” more than you can pay off with your salary – that little bit only grows every month till it reaches a point where your salary gets over on the first of every month.

This is a ridiculous situation to be in – not only financially, but also in terms of living a meaningful life. If your number one worry is sustaining your lifestyle then that doesn’t allow you to think about growing your net worth or even branching out into things that you truly enjoy doing.  It just takes a lot of your mind space.

Getting out of this is simple – really simple – spend less than you earn, and if you think it is much more complicated than that then you simply aren’t doing it right.

This brief and excellent post by The Weakonomist both explains why this is simple, and also why it doesn’t need to be discussed a lot – just something to be internalized and live by.

In the last poll I asked you much money you save, and I am actually quite surprised with the results. A large majority of you save more than 20% of your salary, which is actually pretty good.

First Gen American noted that the result for this poll is probably going to be skewed because it is posted on a personal finance blog, and it’s only natural that people reading such blogs are relatively smarter about their money, when compared with the rest of the population.

That’s obviously true, and the only thing that makes it a little more representative of the general internet population is that a lot of search engine visitors also take the poll, and they are not necessarily subscribers. But in all honesty – yes – the results are a little skewed because someone reading a blog about money, and investments is obviously a lot more concerned about their finances than other folks.

Anyway – if you’re saving less than 15% of your annual salary then know that a lot of people are doing a lot better than you in this department, and if you’ve never thought about your spending habits, then this is a good time to sit back, and take stock of how you can save, invest and build wealth. A penny saved is a penny earned after all.

Let’s look at the results in a little more detail now.

How much money do you save?

About 11% of the respondents said that they don’t save anything, and the only silver lining there is that this percentage is small, and I guess the only reasonable thing for them would be to start saving, however little possible, and develop the habit.

When I think of this section, my thoughts invariably go to a few of my younger cousins, who have just started earning, and saving money or investing is the last thing on their mind. It’s probably good for them to have fun for a year or two, but eventually they will have to face the realities of life, and start taking more responsibility for their money. I hope they think about it sooner rather than later.

If you are reading – Just get started!

Next, let’s take a look at some of the themes that emerged out of the comments section.

Structure your savings and investments

Hema said that she observed that a lot of other people think about their savings and investments in a very structured manner, and they have started to do that as well.

And yes, a lot of people do give a lot of thought to how much they save, what their investments should be like, and I see this almost everyday in the kind of emails I get. People are concerned about the mutual funds they buy, about the ETFs they hold, and insurance they would like to buy.

I’ve quite honestly not seen anyone think about money in a very structured manner in my close family, so for a large part of my life I felt that the whole world was like that, but thankfully I was exposed to people who thought about money a little more seriously, and that has been a really good experience for me.

Structure and thought in savings is essential to get you started, and then to help you make better decisions, so the sooner you take a more holistic approach to your money, the better it is.

Enjoy what you already own

Before I get to this excellent point that Indian Thoughts brought up, let me tell you that I’ve been following her blog for about a year now, and if you want to see structure you can see it there.

She has these goals that she has set at the beginning of the year, and at the end of every month she does a post describing how well she did on the goals. You can check out the post for November 2010 to see for yourself what I mean.

I have her on my reader just for the inspiration that I get from her discipline, and I really admire her for that.

To her point – I feel that personally I’ve spent money many times just to kill time or overcome boredom, and that’s the worst way to use your money. For her, it has been enjoying what she already owns, and I’m trying to build this solar cell charger that keeps me occupied in my free time. I have made very little progress in developing it, but the point is that it keeps my mind from wandering to other wasteful activities, and even if I ultimately fail at building this solar cell phone charger I would have learned a few things I didn’t know before, and hopefully not wasted time on buying junk to keep myself occupied.

If you’re the kind of person who sometimes shops just to kill time, then you might want to think about this point a little more.

Pay yourself first

Patrick spoke about paying yourself first, and this is a common theme that you come across many personal finance blogs. The idea is that you set up your bank account in such a way that it automatically transfers a certain sum every month from one account to another, and forces you to save.

If you’ve tried to save, but not found much luck with it then you can try this automatic way and see if it works for you. I have neither positive nor negative feelings about this, but I know that it surely works for some people, so you should definitely try it out if you’re having trouble getting into the saving habit.

Conclusion

I don’t write about the thrift or the savings aspect of personal finance as much as some other bloggers do mainly because it is somewhat boring when compared to looking at yields, or discussing IPOs and ETFs etc. but I do realize that being thrifty, and having a good control on your spending is really important too, so for suggesting this topic and bringing my attention back to it – a big thank you to Raja, and of course a big thanks to all of our commenters for their thoughts too!

]]> http://www.onemint.com/2010/12/07/poll-results-how-much-money-do-you-save/feed/ 2 http://www.onemint.com/2010/11/29/new-poll-what-percentage-of-your-monthly-income-do-you-save/ http://www.onemint.com/2010/11/29/new-poll-what-percentage-of-your-monthly-income-do-you-save/#comments Tue, 30 Nov 2010 02:20:46 +0000 Manshu http://www.onemint.com/?p=5547

Yesterday I asked for poll ideas at my Facebook page (why haven’t you liked it yet?), and reader Raja Panda suggested the following question:

About what percentage of salary(net) people save at what income level.

I have simplified this a little bit by removing the income level because it’s easier to conduct the poll that way, and also because your standard of living increases as you start earning more, so while you may think that you will save more at a higher salary, in reality that is not the case.

So, here is the question for the new poll:

What percentage of your monthly annual income do you save?

• I don’t save anything currently
• Between 1 – 5%
• Between 6 – 10%
• Between 11 – 15%
• Between 16 – 20%
• Above 20%

The poll is on the left sidebar, so feed and email readers please click through the site and vote. Also leave a comment because as you know – I use them as feedback when I prepare the poll results post, and of course it gets everyone thinking too.

Leave a comment letting everyone know the changes in your savings habit from the peak of the recession to now, and whether you think about saving more at all, or any other thoughts you may have about saving.

Let me start off by telling you that I am not a very thrifty person by nature, but when I graduated I had a student loan to pay off, which forced me to take a certain amount and keep it aside every month. With time that loan was paid off, but the habit stayed with me. It was like having a chunk of money that I didn’t have before, and luckily I had the sense to continue keeping that money aside, and that helped develop a saving habit.

Then during the great recession, I really realized the importance of having an emergency fund, and being thrifty. If you can live below your means, and have no credit card balance or EMIs you can sleep a lot better at night.

But between the recession and having to pay off that loan, I think the loan had a lot more influence on me just because it lasted so long, and forced the habit on me.

Your turn now – leave a comment about your saving habit, and any tips that you may have to develop a thrifty mindset.

Update: Raja made some recommendations, and since not many people had voted, and the emails were not sent out, I made a few changes in the options.

I engaged in a bit of impulse buying recently, and bought a Sony Blu Ray Player, that I totally didn’t need. I don’t regret it because I have been eyeing one for a long time, but I was thinking about what leads to impulse buying. I did a little research and found several interesting articles that discussed reasons that lead to impulse buying.

Here’s what I found:

1. Navigating through categories lead to impulse buying: I found this paper on e-Commerce that had a very interesting study on impulse buying and what causes it. The paper studied habits of consumers shopping online, and found that people browsing through products by clicking categories were more likely to buy something on impulse than people searching for stuff online. The rationale is that people navigating through categories get exposed to a much greater breadth of products than people looking for products through search.

2. Power Distance Belief (PDB): I found this research paper that discusses the concept of Power Distance Belief (PDB) and its impact on impulse buying. I am not sure if I fully agree with it, or even understand it, — but it’s a really interesting and novel take on the subject. Power –distance belief — is the degree of power disparity that the people of a culture expect and accept. Higher the PDB, the more a person expects and accepts disparity in power. Eastern cultures like China and India have a high PDB and western cultures like America have a low PDB. A low PDB results in greater impulse buying, and a high PDB results in lower impulse buying. The reason for that people is eastern cultures who expect more power disparity, are also brought up to practice self restraint much more than people in western cultures who don’t expect so much power disparity.

It is easier to digest the fact that people who have more self restraint are much more likely to avoid impulse buying than people who don’t have that level of self restraint. To stretch that concept to cultures and expect power disparity and such, — well that is something I am not too sure of, and will leave it to you.

3. Prosperity: I really don’t need research to tell me that prosperity leads to impulse buying. During the peak of the recession – impulse buying was not even something I thought about, let alone engage in. Now, that the situation has markedly improved, — a lot of people are engaging in it, including myself.

4. Shiny stuff causes impulse buys: According to this piece, things that are sparkly, noisy, jiggly, furry, fuzzy, or have any other feature that makes them draw attention will sell well on impulse. This makes sense too, because the more attention something draws, the more likely it is that you will think about it and end up buying it.

5. Price: This factor is the most talked about when it comes to impulse buying. A lot of people say that they indulged in impulse buying just because something was on a discount.  I am sure deals and discounts contribute to impulse buying, and when we see something priced much lower than what we are used, — that triggers a desire to get that thing and save money.

A large part of all purchases are attributed to impulse buying, this is undoubtedly good for retailers, but it’s not as good for consumers. I say that because a lot of my own impulse buys don’t end up getting used at all, and I regret spending any money on them.

Image by Glenneroo

My Wealth Builder had a very interesting post about his observations on people in the Early Retirement Forum.

It is a forum for people who have either retired early or plan to do so. He picked up the following things while going through some threads there:

1. Members show above average understanding of financial matters.
2. They are regular people with regular jobs.
3. Frugality is the main theme.
4. Do it yourself investing is the norm.

I was encouraged by these observations because none of this is rocket science. If you put your heart to it, you could develop all these habits and skills.

Even if you don’t want to retire early, these are good habits to have anyway, and will serve anyone good over the long haul.

I think the most daunting thing among these is probably developing an above average understanding of financial matters. But I think that is not too hard either. I don’t know what he had in mind when he wrote: above average understanding of financial matters, but I am guessing that someone who knows when he will be charged bank overdraft fees, is familiar with cost of mutual funds and ETFs, savvy enough to hunt for best interest rates, cheap brokerage houses and such would qualify as a person who has above average financial knowledge.

You don’t really need to know what LIBOR is, or how options prices are calculated to be money savvy. You need to have a general awareness of things going around you, and learn about how to get good deals, make the most out of your investments, avoid paying high fee or expenses etc.

This is really not too hard, and all it needs is a willingness to apply yourself. But, it is the application part that is probably the hardest (at least for me anyway).

I normally tackle problems by breaking them down into smaller problems, and then attacking the hardest one first. When I am fresh and new at something, I have the highest chance to go all the way. So, that way the hardest thing gets done first, and when I see that objective met, it is much easier to get through the other things also. The fact that the problem has been broken up makes it a lot less daunting and a little more manageable.

So, take your pick among one of these four things, break it down into smaller problems, and attack the hardest one first.  This might be your first step in the journey of a thousand miles!

Bing Shopping has a feature that lets you earn cashback on certain items. Currently, this option is only open to people who have a valid mailing address in the US, and are over 18 years of age.

In order to use Bing Cashback, you need to open a cashback account using your Windows Live ID or your email address. I used my Gmail id to open an account. It took about five minutes to open the account and add some additional information to it.

Next you search for stuff on Bing, click on the result to buy from the store, login to your Bing cashback account, and do your shopping. Pretty much what you’d normally do, except there is an extra step of logging in to your account.

Not everything you buy through Bing will be eligible for cashback, and only search results that have the “Bing Cashback” icon next to it are eligible. The interesting thing here is that the same thing may have a cashback at one store, but not at another.

I searched for Dell Mini 10v, and saw that the organic search results didn’t have the cashback option, but the sponsored results had Dell’s website as the first result, and it had the Bing cashback icon on it.

I clicked on the sponsored result, and it took me to a page which asked me to enter my Bing cashback email address. After logging on to the website, I could shop for the Dell Mini, and get 5% cashback (I didn’t actually make the purchase). What I am not sure is whether I will get cashback, if I buy something else from this website. The Bing FAQs say that as long as it is the same session, and the product is eligible for a cashback, I will get it. But I don’t see a way to find out what is eligible once I am on Dell’s website.

If I change my mind and decide to buy something else, I’d much rather do that product search on Bing again, rather than guessing whether there is a cashback or not.

Bing says that it may take up to 60 days for them to credit the cashback to you, and there is a minimum payout amount of 5 dollars before they can credit anything.

There is a quick cashback option that lets you get the cashback immediately without having to wait the 60 day period. To take advantage of quick cashback, you must join that program, make the purchase from a participating store, and pay through PayPal. I didn’t see many participating stores in the quick cashback program, so I don’t think the quick cashback program is as effective as you may like.

If you use coupons or other discounts, then you may not be eligible for cashback on that item.

I think this is a useful program, and one that you can take advantage of, if there aren’t any discounts or deals on stuff you are buying.

Here is the link the Bing cashback FAQs, in case you are interested to learn more. If someone has used this service, please share your experience.

This  is a guest post by Financial Information Blogger

Recession! Recession! Recession! No other word has impacted us more in the present times than this, and why not?

You know as well as I do that we need food to fill our stomachs, and that comes with a price.

You might be apprehensive about keeping your kitchen fire alive during this financially lean period. Don’t worry; I’m here to give you some simple tips that are really working for me.

Believe me; I never knew that I could develop immunity to the recession so well! These tips are not only for managing the present crisis, but they are going to help you in managing your money well even during the boom period.

A little adjustment here and there is going to work wonders for your financial health. After all, it’s your money, and it pays well to spend this precious commodity wisely, regardless of a boom or bust.

Your money management project will be like any other successful project, which starts off well, proceeds well, and ends well with all the risk factors being taken care of.

Starting Off Well Is Half Work Done

Wise money management starts with identifying ways in which you can slash your present expenditure. This is not to say that you should just keep drooling over a piece of pie at the bakers and not buy it, but to reduce the number of pies you buy every week. In other words, I’m not asking you to starve but to cut down your extra expenditure. I’ll give you the step by step procedure that I follow to do this:

1. I jot down my daily expenditure in a diary. I know, it takes patience to develop this habit, but you’ll see that when you find money disappearing from your wallet day in and day out, you’ll know where it is going.
2. The day I get my pay, I celebrate for being the proud owner of some hundreds of dollars. But I know that my riches will desert me fast, if I don’t protect them from my eager-to-spend hands. I make a budget, which gives me a clear picture of my income and my expenditures. Immediately, from experience I know the expenditures that are mandatory and those that are optional. I control the optional ones as much as I can.
3. Even after making a budget, I could make out that I was not faring as well as my colleague who draws the same salary, but is able to save more. I went to a financial advisor, who pointed out loopholes in my present pattern of spending. I was amazed to see drawbacks in my way of spending that I was unaware of. He suggested some superb strategies for investing my money because of which I’m financially very healthy today.
4. I am not an avid user of credit cards. I believe in paying cash most of the time because I don’t like the idea of buying things on debt, if I can spend cash and settle the deal. I also noticed that my credit amounts piled up uncontrollably because the concept of getting things without having to pay immediately made me pick up more things than necessary whenever I visited malls. The frequency of my visits to the mall also increased without me being consciously aware of it. So don’t use credit cards as much as possible.
5. If you really have to use credit cards (I understand that you need to really use it in some cases like when you are traveling) go for those cards for which the interest rates are low because if you’re not able to clear off the borrowed amount every month, you’ve had it.
6. I created a CD (Certificate of Deposit) Ladder with my bank savings account.   If you aren’t clear about what a CD Ladder is, it is a scheme of depositing money in banks for which they pay you interest for the term agreed upon. If you want liquidity of cash and good interest rates, go for a CD ladder in which you fragment your total investment, make short term investments and use the interests you get on these investments for investing in new schemes. This process is a slightly complicated one and I advise you to just visit a bank that offers CD ladders for understanding the process thoroughly.

These strategies helped me in preventing my finances from going haywire. I was happy that I was able to check my extra expenditure and channelize my monetary resources well.

In the next step of money management, I’ll give you some easy-to-follow steps that will help you in checking your extravagant nature. Don’t feel bad when I tell you “do this and don’t do that” because the benefits of such restrictions are very fruitful. After all, in this materialistic world, money rules and gives security.

Resort To Money-Saving Lifestyle

Well, I can sense a streak of disappointment, reading the title! Wait a minute; let me explain the concept to you.  A money saving lifestyle does not necessarily mean a modest lifestyle full of hardships. It only means that by making certain easy adjustments in your lifestyle you’ll be saving a lot of money. There are some modifications that I made to my lifestyle and I am a richer, happier and healthier person. Just read them below:

1. Take homemade food to office – Till a few months ago, I always used to eat at a fast food restaurant near my office at lunch hour. The menu was delicious and the food out there was an addiction. But during the recession, I could not afford that $5 pizza everyday. I thought of an alternative. I started taking homemade sandwiches to office for lunch. They were easy to make and healthier than the fast food joint pizzas. The sandwich was cheaper than the pizza, as it carried no extra cost owing to business profits and service charges.  To my pleasant surprise, I started shedding weight owing to the less fattening ingredients of the homemade sandwich.  An occasional treat at a restaurant, a hotel or a fast food joint does not burn a hole in your pocket, but eating outside everyday is something that is best done when you have money to burn.
2. Forget beverages, drink water – When thirsty, I would guzzle up a bottle of my favorite soft drink. I found that it was not only expensive but bad for my health too. TV commercials push these beverages claiming that their isotonic salts quench our thirst but this is just a myth. Nothing is better for your health and wealth than a glass of pure water when you are really thirsty. Drink beverages but not regularly.
3. Repair that old and run down article before it’s too late – Whether it’s the human body or a household article, I have only one message. Keep it in good condition and fix the slightest problem at the earliest. This will save you a lot of money. If you’ve got a health ailment go to the doctor, don’t wait for it to worsen because it will cost you more to get it treated then. Moreover it might cost your life, if it’s too late. The analogy stands good for any household article or vehicle.
4. Don’t overstress those temperature controlling appliances – I found that constant usage of my air-conditioner or room heater made my electricity bill soar up. Moreover, during extreme weather conditions, I would set the thermostat settings at a large difference to the natural temperatures. This would stress out my machines causing them to consume more electricity making my bills soar up.
5. Beware; don’t get trapped in the discounts and free gifts trick – These days, when I walk through malls, I see huge hoardings announcing huge discounts on shirts, pajamas, toys, food, shoes, upholstery, jewelry, perfumes, etc. Just be careful! These are simply tactics to make you buy more. Not only that, don’t ever fall into the “Buy One Get One loop”. You’ll simply dupe yourself into buying things that you actually don’t need or need in smaller quantities. Clipping coupons concept is somewhat similar.Try and save wherever possible, rent textbooks, instead of buying them if you can.
6. Scrap landline phone connections when you’ve got a cell – Landline phones connections are too expensive to maintain. You’ve got to pay huge amounts only for keeping the connection intact, even if you don’t make a lot of calls. Get a cell phone connection with prepaid charges and pay for what you use, nothing more than that.
7. Give your car some rest, just walk – There was a time when I simply could not live without my van. Even to a restaurant that is just a mile away from my house, I would take my van. As a result, my belly grew along with my fuel bill, due to lack of exercise! During the lean period, instead of using my van, I started walking .This not only saved me a lot of fuel and maintenance costs for my vehicle but also made me slim and fit. After all, walking serves as a good cardio exercise.

Identification of faulty expenditure practices, making the right investments and lifestyle adjustments raised the readings of my wealth meter. I was no longer one of those thousands who were struggling to survive. I was a successful survivor – a Darwin’s survivor, who proved to be one of the fittest people to survive the recession!

Ending narrations of my fiscal escapades without letting you know how I recovered after slipping several times, will leave my message incomplete. Just check out what I’ve done to control damage:

Recovering From Blunders

To err is human. Despite your best efforts, taking inappropriate action is inevitable even if you are an expert at managing your monetary resources. There might be times when you’ve got to face trouble for which you are not to blame.

1. Banking and financial agencies always came forward with attractive loan offers, but I would always resist them because I wanted to avoid loans as much as possible. Being a businessman, there were times when I got offers to invest in new ventures by taking secured loans. But I was wise enough to realize that secured loans are quite risky and if the venture fails, you’ll be losing your property, and will be taken to task by credit report agencies. I believe in saving up enough money for investing rather than take loans when I don’t have repayment capacity.
2. Don’t be a lamb for the credit agencies. Don’t take a loan, but if you do; you have to know your rights very well before you take from anybody. There are lending agencies that take advantage of your vulnerable position as a borrower and try to dictate terms that are much beyond fair limits. Go ahead and brush your knowledge about your rights with a Privacy Rights Organization.
3. I don’t encourage taking huge debts on credit cards because these agencies will rightfully be after your life, if you are not able to pay them. If you really have to use credit cards, and if you are in a soup, just let them know that. They will work out a solution for you. This is referred to as debt negotiation.
4. I feel that taking consolidated loans is better than taking individual ones. It will save you the headache of penalty on delayed payments, and higher interest rates. For students, consolidation loans are really helpful. The one time payment facility of consolidated loans saves you the trouble of penalty and extra payments which you can use to pay up your main loan. This will pull you out of your debt faster.
5. Choose the lender carefully. My e-mail was literally spammed with emails from lending companies, when I was contemplating taking a loan for buying a property. I was tempted by the offers of many lenders, but was cautious enough to choose a lender with reliable credentials and genuine intentions. Unfortunately, if you ever get trapped by a lending company that is not fair to you, you’ve had it! I always read the fine print before committing to anybody. Don’t ignore the fine print. It takes a bit more patience to go through it, but you’ll not regret your decision for doing so. There are too many cases of borrowers being duped by criteria that they overlooked before committing.
6. Never go bankrupt, even if drowned in penury. Never loan more than what you can pay back. You’ll simple scar your debt history. It will remain on you for about a decade and will prove to be an obstacle in taking loans in future even when you are in genuine need of it.
7. Go through your credit reports carefully for any unexplained or unfair discrepancies. Don’t ignore them. If necessary talk out the issues with the crediting agencies and sort them out immediately so that you don’t have any problems later on. Bad credits are a burden that you can do without. Just consult credit report bureaus and note what they have to say about you. If you find out that you are not in their good books, take up the matter with them immediately.
8. Above all, use your commonsense – It really irritates me to realize that what we call commonsense is commonly lacking in us! Using this God-given commodity can really steer you clear of trouble. Your commonsense should tell you that all that glitters is not gold. So, just watch your step while you make progress and see how well you can survive in the toughest of times.

“All days are not same. Save for a rainy day.
When you don’t work, savings will work for you.”

You’re welcome to share your money saving tactics with me here!
This is a guest post by Financial Information Blogger, Involved in giving most useful & professional tips on how to manage you personal finance & other important aspects of finance  industry. If you like what you see here, please consider subscribing to their RSS
feed.

Disappearing Act by Coffee Monster

Almost everyone has asked this question at one point, or the other. It seems, that you make a lot of money and then, at the end of the month – you find that you don’t have anything left in your bank account. You can’t think of any ‘big ticket’ items you bought in the month, but at the end of the month – there is nothing left.

I struggle with this all the time and so far the most effective way to tackle this has been checking my online bank account at least once every day.

I have made a conscious effort to pay for most of my purchases through my debit card, so that, it reflects in my online bank account almost immediately.

At the end of the day, when I go through my account, I can see all the debits that took place during the day. Instead of looking at the amounts – I look at the names and if there is something that I can’t recognize, it’s usually something that I could have avoided buying. So, the name of an unknown gas station helps remind me that the next time I fill up the car – I need to go straight in and out, no need to go inside the store.

I think the time I invest to recognize the name of the store helps register the purchase better in my mind. If I don’t even remember the name of the place that I spent money, how can I possibly remember the purchase itself?

So, the number of times I take the store address, as it appears on the bank statement and put that on Google Maps to take a street view, helps me immensely in registering that purchase and the act of spending.

This is probably the most important factor in why it helps me be a little thriftier – because the purchase registers, not when I actually made it, but when I look it up later.

The other major reason, why this helps me is that it shows me how my balance is dwindling and then the next time I am about to spend money – I sense that the number is going to go down a little and so there is a slight hesitation in my mind.

I know this is not very scientific and I think it won’t work well for most people, but somehow it works reasonably well for me. It’s beyond me to make budgets and use online tools and in the absence of that, looking at the bank statement every day proves quite useful.

Choose personal banking services for checking account and solution.

Image by Amycqx

One of the very first jobs I did was — intern with a washing machine company. For a brief time, I used to call up customers and seek their feedback on the company’s washing machines.

There was one call that I will never forget. When I called up a customer and asked, if he was happy with his washing machine; he said — no.

He said — “it works, but, it doesn’t wash”

He was not angry at all and said it in a very — matter of fact way. He told me that when they had bought the washing machine several years ago, he was very satisfied with it, but, over the years — its effectiveness had diminished. It still runs the full cycle, but somehow it doesn’t wash the way it used to.  He never bothered to complain to the company because nothing was specifically wrong with it and he mentioned it; only because I called up.

I filed his complain in the log and I am not sure if anything happened after that.

A few years later, I got a boss who had the philosophy that you should cater to the customer who can create the maximum nuisance — first, and then deal with everyone else.

He used to say that it was not the nuisance itself, but the fact that such a person is more likely to spread negative news of your products among his friends and family and can cause a lot of harm, if left alone.

But, the really insightful thing was his definition of — nuisance. He said that there were some customers who were rude to his staff and raised tantrums, and there was really nothing he could do about that.

He had no way of controlling the temper of over a hundred salesmen who worked for him, and if someone was behaving like that — he had no control over how his team would react.

Instead, he focused on the people who complained persistently. People, who — called up week after week and were not necessarily rude, but, just didn’t let go.

He wanted his team to focus on those type of people. He told them that they had no right to be angry on such customers and the fact that they had not let up calling — shows that they are still talking about their bad experience with their friends and family and causing damage every week.

When I heard him speak like that, I thought of the man with the washing machine and how he never created any nuisance. That is probably the reason he was stuck with it. Had he complained a few times, they might have done something about it.

Personally, persistence in dealing with support staff has paid off for me. The most difficult thing was to get in the habit of picking up the phone and calling up, but, once you do that a few times — it becomes second nature and you even start enjoying it!

Since, I have been on the receiving end myself, I can’t be rude, but that doesn’t stop me from being persistent, and I think that being polite and firm is better than being rude any day.

So, don’t live with a washing machine that works, but, doesn’t wash, pick up the phone and be prepared to call up a few times.