2. Relevance of Percentages (%)?InthisChapter
How to create the habit of thinking
about money matters in % terms
Examples
3. Relevance
ofPercentages
Taught in schools but maybe long forgotten, most
of us do not appreciate the importance and
relevance of percentages in our daily life.
If we understand how to interpret and
apply them, they can make a huge
difference in our decision making.
In this chapter, you will learn how to apply and
interpret percentages correctly and benefit from
it in your financial decisions.
4. Start thinking about numbers in terms of percentages, not absolute terms. Over time,
it will become your way of thinking and an involuntary habit.
Example
If the delivery charge of an item is Rs.75, you may think it very less. But if the cost of
the item is only Rs. 150, then the delivery cost is 50% ( 75/150) X100) of the cost the
item, hence very high. You might then reconsider ordering that item!
Keep track of expenses in terms of percentages. Make this a regular habit.
Example
Say your monthly restaurant bill is Rs.7,000 and your monthly income is Rs.21,000.
Then it becomes 33.33% ((7000/21000) X 100), which may be high. This will prompt
you to control this expense and use the saving for some productive investment.
CreatingtheHABITofthinkingaboutmoneymattersin%terms
1
2
5. Example
Flat 50% OFF! How many times have you seen this?
Hold on, is it really 50%?
Below will be written, service charges Rs. 80.
Say the Original Price is - Rs. 240
Discounted Price - Rs. 120 (50% of 250)
Service charges - Rs. 80
Net Price = Rs. (120 + 80) = Rs. 200
Therefore Actual Discount % is
= ((240-200)/240) X100
= 16.67% and not 50% as loudly advertised!!!
Create the habit of calculating real discounts.
You will save money by not buying just because
there is a SALE going on!
