EconomyFinancial PlanMoney saving tips


Each and every household in this country is worried about how the prices are going to go and how are going to handle their personal budget after GST is applicable. There is really no need to worry. For some items the tax has been decreased and for some it has gone up. It all depends on your lifestyle at the end. If you like to shop for branded products then you might be in trouble. As for those who live quite a simple lifestyle, there is no much to worry. This doesn’t mean that the GST won’t affect the smaller households. Each and every household would be affected by this, some less and some more.


There are no taxes on food items like cereals, rice etc. All these items don’t come under GST but if you go for any of the branded products for your daily use then you will surely be affected by the taxes. As I said earlier, it all depends on how you live and what all products constitute your monthly budget. If you buy things like tea, bakery products, vegetable oils, refined sugar, milk and beverages etc. from any of the brands then the tax on them might save you save as it has been reduced from what it was before. Most of us buy these items so we all can save some money due to the tax reduction on these. Other times like preserved vegetables, butter, cheese, dry fruits, frozen meats and branded paneer etc. have experienced a tax increase.


The items that we generally use for personal care are now costlier than they were before and this may shake up your budget due to the tax increase. If you prefer to use good branded products for self care than you might end up in a bind. Things like toothpaste, soap, hair oil, toilet paper and detergents etc. have seen a huge reduction in the tax on them. Most of them had 26% tax charge which has now been reduced to 18%. These items may balance the tax rate increase on other items like floss, deodorants, perfumes, shaving cream, after shave, shampoos, hair dyes and sunscreen and make up etc. These items are already very costly and the tax on them has been raised up-to 26% so it might be a problem especially for the ladies. You might want to hold off on the expensive make up and skin care items.


Home appliances like fans, coolers, vacuum cleaners etc. will cost you even more than they already did. For those who are thinking of adding on a new electronic member to the family will have to pay more tax now. When you buy the appliance you might have a negative balance in your budget for that month. Be ready to throw out more money on these appliances because mostly all white goods are getting costlier.

Other small household products like broomsticks, candles, matches, aluminium utensils etc. have a reduced tax rate on them. You have to pay 5% or 12% on most of these when you were paying around 26% before. This doesn’t really affect the budget as most of us don’t use these products as often. The reduction on LED lights is huge, from 26% to 12%. This may now force most of us to put in LED lights in our houses and save some electricity and the money on taxes. Finally we will save some money legally.


We pay insurance premiums regularly and due to the digitalisation happening in the economy, we usually use credit cards or debit cards. The overall banking transactions have increased and also form a major part of our budgets. Now, with the introduction of GST all the banking and insurance services have become costlier. The tax rate that they carried earlier was 15% which has now been increased to 18%. This 3% increase in the charges can create a lot of difference even if it may seem small. This might make a huge difference in our monthly budgets as we use our credit and debit cards or any of the bank services very abundantly. The processing charge has increased which will result in costlier online transactions. Most of the credit cards will create this issue but you can also save some by going for HDFC credit cards. For instance, there are so many HDFC credit card offers that you can choose from and save money from. You can save some there but overall you will be giving out more. The personal budget of most households will take a hit because of this.


Many would have planned extravagant trips for the summer. This might upset you a little that the travelling charges have increased and the tickets are costlier now. You might have planned your vacation right in your budget but the ticket prices will change that. For those who already bought their tickets, you are in the safe zone. The travellers might not feel good about this decision obviously. Again, it all depends on how you wish to travel. The tax will obviously be more on first class tickets. You may want to go for economy this summer.

Well, plane tickets and train tickets are one thing but the transport that we use daily has become cheaper. Some of you might be planning on buying a car. There is a little good news for you. The overall taxes that you pay while purchasing a car have reduced by Rs. 15000-20000 on some cars. It’s not a lot but it is something. You will surely feel good about saving this money, maybe you can have the celebration that you postponed for next month so that your budget doesn’t take a hit. Now you can party with that money. Same is for some two wheelers too.


We are very happy when the phone bill is lesser than we expected for the month. You may not be as happy this month as the phone bill will surely be more than what you usually get. The tax that was applicable on telecom services before was 15% and now the GST is 18%. Mobile bills are huge part of our monthly budget. We use so many telecom services like landline, broadband, data and calling on our phones, all these will carry 18% separately so you will obviously have to pay more if you use all of them. People working from pay check to pay check would have a little problem dealing with this.

With all the increases and decreases in taxes, an average household can still save Rs 2000-3000/- every month. At the end, it all depends on your spending habits. If you spend more, you pay more and if you spend less, you save more. Most of the items of daily needs have less tax on them and only the items which have higher tax rates are the ones we purchase once in a while. The kind of goods and services that make up your personal budget will decide whether your budget will see a negative balance or a positive one.

Even if the spending turns out to be more you can hold off your expenditure for a while and get back on the horse in the meantime. The changes might be huge for some and some may not face any problem at all. All you need to do is rework your expenditure and you will surely find away to save money at the end of the month. All this is done for our sake only. The more government saves, the more it will spend on us.

Vikas Agarwal
the authorVikas Agarwal
Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.

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