If you use mobile apps and websites to buy products regularly, chances are that you would be hearing these 2 words a lot in recent items – Cashbacks & Reward Points.
Now who doesn’t love a little cashback here and a few reward points there?
Nothing wrong with it. It is just an extension of the concept of ‘Saving Money’. But what I feel is that there are many people out there, who are focusing a ‘little too much’ on these cashbacks and reward points.
And they are doing this for hours at stretch. They are constantly searching for better deals.
Again…I say that there is nothing wrong here. All these are ways of saving money indirectly.
But there is something about the concept of SAVING which we often ignore. There is a limit to how much we can save. You might be earning Rs 50,000 a month. As of now, you are able to save Rs 10,000 a month. And if you can get some better deals and cashbacks, then you might be able to save an additional thousand or two a month more. That’s it.
So all in all, you would have saved Rs 12,000. That’s it. Could you do better than this? Yes. You could have cornered some better deals and more cashbacks.
But there is a limit. Limit to how much you can save. At most, you can save is Rs 50,000. Isn’t it? On an income of Rs 50,000 it is impossible to save Rs 51,000.
The formula is simple:
Income – Expenses + Cashbacks = Savings
You can control your expenses & increase your cashbacks. But only upto a limit… And that puts a limit to how much you can save.
So doesn’t it make sense to focus more of your energy and time on something which you can increase?
I think it does. And I am talking about INCOME part of it.
Honestly speaking, there is no limit to how much you can increase your income. But there is a limit to how much you can save. And I feel that this is the reason why as a country, even after having one of the highest savings rate in the world, we are still poor. We focus so much on savings that we essentially forget, that we can also increase our income…and there is no limit to it.
Just think about it.
This post makes me think about the debate between Earning More Vs Spending Less. Will probably jot down my thoughts and share it with you all sometime soon. What are your thoughts on this…?
PS 1 – By increasing income, I don’t mean salary increases.
PS 2 – The formula above is just to show limitations of savings. It should ideally be (Income – Savings/Investments = Expenses).