There are plenty of ways to get ahead. The first is so basic I’m almost embarrassed to say it: spend less than you earn.
- Paul Clitheroe
The greatest of kings, the finest of artists, the sweetest of vocalists, the smartest of painters and well, the great going you and me! If there is a common connecting factor amongst us all, that would be money, apart from breathing and the strive to survive at all costs!
Money gives you the status, the class, the power and the position in any society. The difference is some people know how to make use of their pennies and cents and the rest of the world doesn’t know the very basics of money management.
The following tips may help you in managing your hard-earned money.
1. Your monetary Worthiness: Guess you know how much you are worth in monetary terms; if not, start calculating today. Compute your assets in terms of your home, properties, investment in stocks and shares, your money in the bank, your investment in precious metals etc; you will know where you stand today vis a vis your requirements, liabilities and responsibilities; you may have to plan your present and future in terms of finances.
2. You do budgeting, I suppose: Make a clear cut budget of your income and the allotment of your money to various expense heads. Stick to it and don’t get tempted by a beautiful dress or by a great, unbudgeted holiday etc.
3. Save to Invest: Put some money, however meagre it is, away in your savings account; when you earn, you are entitled to keep something for your future, before you spend the money on your various needs and spend money on your family. Invest the saved up money wisely.
4. Emergency Fund: Always keep an emergency fund; accidents don’t wait for you to accumulate some funds and then happen. You may never know about tomorrow in anyway.
5. Your Bills: Pay only your bills and not with fines and penalties. Organize your bills in such a way that you should know the dates of payments of all the bills in advance. Make a note and keep it readily available for your reference.
6. Credit Card Trap: Cancel all, but one credit card of yours; even one, only when required. If not, at least go for a credit card with lower interest rates. Credit cards eat up a lot of your money on interests, if the card payments are not being done on time. Even otherwise, the rates of interest on the credit cards are on the higher side. Try to pay more than the minimum amount on the credit cards.
7. Insurance, insurance and more insurance: Avail of life insurance, health insurance, household insurance, car insurance and accident insurance. It’s easy to pay the meagre insurance premiums to the insurance companies, than the huge payments to hospitals and others, when something unwanted happens.
8. Note your expenses: Maintain a dairy or a notepad and compulsorily write the daily expenses on it. You may even cloud compute your expenses on the Google Drive excel sheet. By the end of the month, segregate the expenses and understand how much of money has gone under what heads and reduce the spending on unwanted expenses.
9. Bank statements: Read and try to understand your bank statements. Enjoy and relish the accumulation of money in your name.
10. Check your bills: You should check all your bills properly and when in doubt, you should call the customer service centre or the concerned offices to clear your doubts. Why to pay more when in doubt?
11. Home loan account: A great chunk of payment goes into the home loan account; hence, be on the alert for lower home loan rates from other banks or refinancing institutions and shift your account to the best of them.
12. Always make comparisons: Compare in case of the credit card interest rates, compare in case of the home loan interest rates, compare in case of the vehicle insurance rates and compare and save money even on expenses.
13. Attend Courses: Attend a course on personal finances to learn more about the tools and techniques of saving and investing. Learning is also an investment in this case.
That’s precisely why we would like you to have a separate emergency fund so that you don’t need to make use of your regular savings on an emergency. Also, emergency doesn’t happen all the time. You should be able to segregate your emergency expenses from the other expenses and spend accordingly.
Q I am not able to save much money by the end of the month. How can I stretch to save more?
Few important lifestyle changes can help you save little extra money. Like, while shopping look for good and cheap deals, buy things in off seasons, do purchasing from a wholesalers. Eating out too often will get heavy on your pocket too. Maintain a piggy bank at home. Keep putting your coins or small changes in it. Remember, drop by drop forms the ocean.
Q I am getting married soon. My to-be husband is in debt. I am confused of getting married to him?
My suggestion is to wait till the time your fiancé is debt free. Because marriage will bring lot of changes in all aspects of life including finances. So to develop a strong relationship you both first need to be financially sound also.
Take charge of your finances. Educate and make yourself aware of yours and your family’s money. Control your urge to splurge unreasonably. There is only one secret….Spend less than you earn. Save more than you spend. Because….
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