Ways to manage money, as we all know is not something that we are taught from the early days of our childhood, but it is something that we have seen while growing up. It is only imperative that we plan and prioritize because “money” is a limited resource and to have a balance between savings and expenditure is a true picture of our financial stability.
We have seen a lot of buzz around the topic of financial planning and how one can go about planning their future seamlessly by reading books, listening to podcasts, motivational speakers, and even talking to professionals. No matter how much access you have to these resources but merely referring to these can’t guarantee you solutions. It can, however, provide a holistic picture of what we can do with what we earn. It necessarily doesn’t mean one has to burn a hole in their pockets to achieve their dreams nor is it rocket science. It is only about taking one step at a time which will bring you closer to your goals.
All of this can be achieved by starting to distinguish between your needs and wants. Ask yourself before making a buying decision that is it something you need or is it a temporary want. Go back to your school days and you will get the answer as to how you used to make choices when you had limited money and wanted to buy snacks from the canteen, but your assignment required stationary material. Then only you could prioritize and decide what was it that you needed. Likewise, this approach applies to the bigger decisions of life!
Let us dig deeper and understand what actions can we take to be better at money-saving.
- The Savings Rule
People can manage their finances by simply applying the saving rule. Make a point to save by keeping aside a designated amount every month before you go with spending your money. So, it becomes a habit to save some amount first and then go for spending. By saving one can easily inculcate budgeting as part of their Saving-Spending Mantra. Budgeting helps one have a clear view as to demarcating between different expenses and accordingly allocate their money. By having a budget one remains in check as to what is the limit relating to different expenses one must incur no matter what.
- Investing the way to riches
There are a lot of investing avenues these days like investing in FDs, SIPs, Cryptocurrency, Shares, NFTs, etc where one can invest money. But sometimes we get lured by what appear to be clickbait ads and hearsay about the overnight success of individuals which leads to people indulging in investing their money without assessing the pros and cons of these different investment avenues. This ends up resulting in financial blunders. Therefore, one should have proper knowledge about how to make money from money.
- Get rid of things you no longer need and look for alternatives
Think and cut back on expenses every month that you no longer feel like incurring but often end up overlooking like subscriptions that you no longer need, maintenance charges on assets that you don’t use much, and are a financial drain. Don’t forget, money saved is money earned. And just by following this, you will be surprised after knowing how much extra you were spending where you could save a lot.
- Don’t let taxes be a threatening ax!
Educate yourself on important financial information like calculating taxes, knowing where your money goes, whether you will be left with enough to plan your future, etc. Understand the tax-saving schemes you can get on to, be it investing or taking the insurance, but keep your eyes wide awake and understand the taxation system of your country. All this will help you safeguard your future and plan better as taxes are a liability that one can’t avoid but can help you to live better.
- Act to save what you have saved
No one would want to lose their hard earn money overnight by being a victim of financial frauds and scams happening these days at an alarming rate, so it is only wise to save what you have saved by looking for insurance plans, looking out for safe investments like FDs and Rds, etc which will help you achieve so.
- In an emergency, run to your emergency fund!
Life is full of uncertainties, and one should take steps to be prepared for the worst. By maintaining an emergency fund one can feel secure and can live stress-free as you won’t be clueless as to when the situation arises that you need money and knowing that you have it under your own hood will only save you time and you from troubles. Keep your money secure and always make a rule to never spend the emergency fund, this could build your financial stability and will also supplement interest income, and not just stopping here, the money will also teach you the value of money and patience.
All In all, managing money in a better way is the simple math of calculating the next step of your journey. Read financial books, and case studies, listen to podcasts to take help from professionals and understand the time value of money and other concepts. But most importantly, take a moment and ponder upon what it is that you need from your future and use the strategies that best suit you to achieve your financial goals. Keep in mind that it takes a lot of research and experience to learn. Don’t be scared to start your journey, just be on the road with full courage, and one day you could also master being a Financial Guru!