How unnecessary items get into our monthly budget

The first decade of the 2000s was rough, what with the 9/11 terror attacks, the War on Terror, and the Great Recession of 2008. So, at the cusp of 2020, we were all hoping for a more prosperous decade. Sadly, what we ended up with instead was a two-year-long global pandemic, a nearly year-long invasion of Ukraine by Russia leading to the largest refugee crisis in Europe since World War II. And now, as we are in the second month of 2023, we are staring down a looming economic slowdown that will have a global impression, brought on as a consequence of the pandemic and the war.

If the picture seems foreboding, it's because it is, and Bangladesh is not exempt from this global economic slowdown. Most private sector companies and employees are already aware of the situation and have buckled down for the long haul, bringing about low turnovers at nearly every company, as well as further optimisation in the workplace to save costs and maximise output. Another telling example of the looming threat is inflation taking the price of everything to new heights.

Faced with this grim reality, the only course of action is to start being careful with our money. That starts with putting our monthly spending under a microscope and finding the luxuries in the necessity and stripping it out. If you are someone with one or multiple hobbies, this is doubly important. The effects of these stringent measures may not seem immediate, but they will pay dividends when the time is right. Although we want bad things to be done and over with, a long time to prepare will be valuable to those with foresight.

Household necessities

Every household has more or less fixed expenses that are needed every month to function properly. These expenses go towards doing the groceries, paying the rent, medical bills/medicine, monthly bills, and clothing.

On average, a typical middle-class family of four spends about Tk 35,000 – Tk 40,000 on groceries alone. This involves a mix of buying from open markets when possible and from grocery retail stores for convenience. This is how it goes for Afsara Alam, a 42-year-old mother of two working for an NGO.

Afsara states, "Since both me and my husband are working professionals, nobody has the time to go to open markets and haggle for a bargain. We usually do our groceries either once at the start of the month, and restock via online platforms if we run short, or break our grocery shopping down into two separate trips.

"On our days off, we usually try to spend it bonding with our families, so buying at the open markets was never on the cards."

Buying everything from retail stores is easily the first thing you should address, because you are not only paying for the produce, but also the service costs associated with having it stocked in these shops. For things like vegetables, fruits, oil, and condiments, it is always a good idea to start at the open markets because aside from getting the freshest products, you will also be able to haggle and get a good deal, sometimes up to 15 per cent less than what you would pay in retail outlets. As for meat, it is always cheaper to buy from your neighbourhood butcher than packaged meat, by under Tk 200.

If you have a tendency of ordering food on some nights, you can remedy that problem by keeping some frozen ready-to-eat meals/snacks on hand. It is also a good idea to give up on fancy foreign brands for any of your grocery items, as you are paying a lot more for something that is available from local brands, often for much cheaper, such as milk, cheese, bread, etc.

"With the rise in inflation, we had to change our habits. We stopped buying from retail outlets and made time to shop at open markets. Sure, it means we have also cut out a lot of luxury items such as chocolates, packaged fruit juices, crisps, and so on. We do keep some frozen meals in stock for the children," shared Afsara.

Bills

Monthly bills take up a sizeable portion of your monthly salary. Some of these bills are unavoidable such as utility bills, while others such as wages for any helping hands and if you happen to own a car, a chauffeur, are there to make your life easier. Just like everything, the price of utilities has also gone up, and just as the economy bears down on you, it also bears down on your hired help.

For your utility bills, which cover water, gas, and electricity, with the latter being the most expensive of it all. There are some steps you can take to keep the monthly cost as low as possible.

For your electricity usage, ensure you are running low-energy bulbs and lights throughout the house. You should also switch off everything in your room when no one is occupying it.

If you happen to have ACs, use them sparingly and for very short durations, and invest in sealing your room to retain the temperature as long as possible. A lot of energy is wasted because many people neglect to fully seal all crevices in a room with an AC. If you are living in a rented house/flat, it is also a good idea to have your meter inspected regularly so as to avoid it getting tampered with.

Rent

If you live in a rented space, this is considered the most 'wasteful' and largest of all expenses that nip at your monthly salary. Depending on where you live and the size of your flat/space, you could end up spending a fortune. If you are looking to make drastic saves to prepare for the rough months or years ahead, finding an affordable place is possibly the first thing you should do. Rents depend upon a lot of factors, but prime locations or areas demand a premium.

Intezar Habib is a 33-year-old working at a publishing company. He says: "My current place, where we have stayed for the past 10 years, is right near the Gulshan lake, and the rent is nearly Tk 85,000 including service charge. That was a huge amount, but since my father didn't mind, and the location was convenient for him, and we tend to share expenses, I let it slide. But with tough times ahead, I find it way too risky financially to stay here.

"We have found a place near Banasree which is similarly sized to our Gulshan flat, but slightly deeper in the area, which will add some extra minutes to my commute, but it is worth it because the rent here is Tk 45,000. That's more than 50 per cent of our monthly expenses saved right there."

Transport

This is another area where you can make significant saves if you take out the luxury. With the rise in oil costs, ride-sharing apps are an immediate no-no unless there's an emergency. CNG usage is nearly as expensive, so avoid using one if you can help it. Rickshaws remain the only budget-friendly, and ecologically sound, mode of transportation left, but sadly, this is also not enough. Until the operation of the Metro Rail begins in earnest for all its designated locations, the most economically feasible decision is to use the bus. Yes, the fare has gone up in response to fuel prices, but for moderate distances, it still beats just about everything else on the road for price.