The covid-19 pandemic has changed lives across the world. Businesses are either shut permanently or temporarily, in some cases where the business comes under an essential product or service category have been allowed to operate with certain conditions attached. Whether we are fighting a pandemic or not, the general rule in business is that the income is variable from year to year, it can be more in one year and may be less in the following year, but expenses are usually the same or increasing, rarely one may find a downward curve in expenses. A downward curve in expenses is possible only if deliberately plan to abstain from spending, and it is possible, let me explain it to you further in this article.

So, if one has an income, one affords the expenses, the savings, the investments, but in the current scenario when most businesses have no income or reduced income, it could become stressful to manage the expenses. Businesses and individuals that enjoy a credit arrangement are fortunate to pay up the liability at an agreed future date.

At the business level, having a long family business history helps me and my family handle the account receivables and account payable smoothly. At the individual level I have witnessed savings, as the social side of things are restricted, hence fewer or no gatherings hence lesser or no expense. Spending can be worthwhile, is something I realised with plastic money. Buying anything in cash has no added value, when compared to buying it through plastic money, like a debit or credit card. Most additional offers our related to plastic money, whether it is a cash back, an easy EMI option, points on your card for the purchases are all additional advantages of using a credit card. Cash back is an immediate saving, points on your card are a saving as it will save you money for any future purchases, whilst EMI’s carry some interest cost for the chosen tenure, there are possibilities to avail no cost EMI’s over certain transactions, so that waiver in interest payment is another saving in itself. Those who have not realised this, I recommend them to start using plastic money for their monthly expenses fixed or variable.      

Besides the above hacks of accumulating savings over using a credit card, I recently found a hack that helps me in restricting my spending behavior whilst using a credit card. Most cards have a billing cycle that starts after the 10th of every month and records transactions for 30 or 31 days that continue into the following month. Recently I started recording my spends on an excel sheet, running it in a monthly format, recording transaction between the start of the month which is always the 1st and the end of the month which is either the 30th or 31st. It became easier for me to reconcile my excel statement with the one that I receive from the credit card issuing bank. I can quickly categories my spends across categories such as shopping, food and dining, grocery, utilities etc. However, I found one complication, the reconciliation made me to refer to data over 2 excel sheets, as the statements from the bank run from the middle of the month to the middle of the following month, but I have mine running as per the monthly calendar. This makes it difficult to keep swapping between the excel sheets for reconciling with the bank statement and the categorizing the charges.

I did this for 3 months, and every time it only led to one thought, that of making it easy by having the credit card statement also run as per the monthly calendar dates, so I ended up calling my credit card companies (I have 2 separate cards) to change the billing cycle as per the monthly calendar dates. One of the companies could accommodate my request closer to the beginning of the month by changing the billing cycle start date to the 3rd of every month, and the other could not as per company policy they could offer 11th of every month as the earliest that they can offer for the monthly billing cycle start date. So, I went ahead with those dates, with a major feedback to both the companies, that they will be losing transactions for those number of days as I will not spend or use my cards on those dates, in order to make it easy to reconcile my excel sheets with the statements.

So now I don’t spend on the 1st and 2nd of every month on Card A and between 1st and 11th of every month on Card B. Technically I have the Card A for 28 or 29 days, so I only save for the first 2 days by not spending on those days in the given month, but its still good enough as I abstain myself from no card spends for those 2 days of the month. It can be debatable that the spend for those 2 days may get forwarded later into the month, but those will be spends that are absolutely mandatory for the month as they may be related to some utility payment or some gifting occasion. What will get restricted is the unplanned and the casual spending during those couple of days in the month, say ordering food for instance. Not much but still a hack resulting out of the credit card company policy over monthly billing cycle dates.

So those are the savings hacks with your credit card usage every month. I hope it helps you with your monthly savings going forward, and will be great to learn of more savings hacks from you.   

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