When calculating lifestyle inflation, we usually consider big-ticket purchases as the biggest burden on our wallets. An unexpected laptop repair or a planned furniture upgrade may seem like significant expenses. However, what many people fail to realise is that, especially in metro cities, the everyday cost of convenience can eat into your savings a lot more.
With almost everything available at just a few clicks, it is easy to lose track of your spending. If you dine out four or five times a month, frequently shop on e-commerce platforms, or regularly “treat” yourself, you also need to consider what these habits could mean for your potential savings.
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Big expenses may come once or twice a year, or three times if you receive a bonus or a good salary hike. More often than not, however, these expenses are planned “lifestyle investments.” The real impact on your finances can come from frequent, seemingly small expenses.
Here's what the math suggests about big purchases
Suppose you decide to upgrade your laptop and buy a new sofa set in the same year.
Expected price of laptop: Rs 50,000 (depends on your budget)
Price of Sofa set: Rs 30,000 to Rs 1 lakh (as per your budget)
Assuming you collectively spend Rs 1 lakh on both purchases, it can seem a lot in the same year. However, you need to realise that your laptop and sofa set are here to stay. With good maintenance, laptops easily come with five years of life, while sofa sets are usually a once-in-a-decade purchase.
This means that overtime, the cost of these items are significantly lower and end up becoming an investment in your lifestyle.
Math About Small Deliveries
Assuming you dine out once a week, with an average bill of Rs 500.
Monthly bill: Rs 500 x 4 - Rs 2,000
Yearly: Rs 2,000 x 12 = Rs 24,000
5-year spending: Rs 1.2 lakh
Assuming you shop online and are comfortable in spending Rs 2,500 to Rs 5,000 in a month:
Monthly bill: Rs 2,500 - Rs 5,000
Yearly bill: Rs 30,000 - Rs 60,000
5-year spending: Rs 1.5 lakh to Rs 3 lakh
These expenses are not necessarily unnecessary, but certainly recurring. Dining out, shopping or occasionally treating yourself can be part of a comfortable lifestyle. However, reviewing these recurring expenses can reveal potential for small cuts that can help you save significantly over time.
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Should You Stop Small Expenses?
There is no universal answer. Small spendings can hide easily as individual orders can feel too minor to question. Still, before you realise, factors such as delivery charges, platform fees, and tips can inflate every order. People also usually plan and compare before making big expenses but that step is usually skipped in small orders.
To deal with this, it is usually recommended to track your expenses, no matter how big or small. After a period, with enough data, you can easily compare what portion of your expenses were genuine and where you could have avoided the splurge. Over time, this can help with becoming more conscious, motivating you to set a cap on such expenses so that the daily conveniences do not become expensive habits.
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