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Are you making good money but are unable to save it? You’ve landed at the right place. Saving money and managing finances is not everyone’s ballgame. So don’t worry if you feel like you’re failing at it. We are here to help you manage your finances.
It’s crucial to manage your finances to achieve financial stability in life and eventually, lead a good high-standard of living. Whether it’s for yourself or your family, saving money is important to get you through tough times, unforeseen circumstances, and of course, to help you buy all the luxuries you wish for. Saving money includes strategically planning, budgeting and investing and wisely spending and saving. These are some simple tips that you need to carve in your mind when managing finances.
Save, then Spend
Everybody wants to save but often don’t know how. It’s a common practice to spend your income on expenses and necessities and then see what’s left in the end. This ‘spend and save’ mindset will never get you through or help you save big. The rule should be to ‘save, then spend’. Trust me if you make this the mantra of your life, saving and managing finances will become so much easier. Always save a certain percentage of your income before you start spending. This could be in a different account, in a kitty, or could be a monthly payment for an asset you purchased. When you know you’re already doing the saving part, you can start spending guilt-free.
Don’t Spend Money You Don’t Have
Do you own a credit card? Repeat after me. ‘Credit card is like a black hole. It sucks you in and never let’s go’. Yes, that’s true. Credit card debt is the worst thing you can bring onto yourself. Credit card money is not your money. You don’t have it yet. Keep credit cards for emergencies. Or if you really have planned and budgeted your finances in a way that you can easily pay it off in the given time. Spending on credit is an addition you need to control or stay away from. The best way is to put a lock on your card, which makes you have to call the bank helpline or open your bank application every time you need to make a transaction. When you add this scrutiny layer, it gives you time to think whether you really need what you’re about to spend on, helps control impulse buying, and well, sometimes makes you lazy and you end up not buying at all. Just know that you need to budget spending based on what you have, not on what you will have later.
Planning and Budgeting
This is the ultimate secret recipe. If you know someone who earns less than you but spends on better things, know that they are budgeting their income. Making a budget and financial planning is such an important part of adulting. Whether you have just started making money, single or married, starting your family, or even a homemaker, planning and budgeting will take you a long way in managing your finances. You can start by simply tracking your income and expenses and making a basic spreadsheet of what you have and what you spend. You can set limits on your spending for different categories. For example, make a budget of 10,000rs a month for clothes, and then go crazy in that budget. You can buy one expensive dress or a few reasonably-priced ones in this budget. Similarly, set limits on eating out budgets, grocery budgets, and others.
Smart Spending
Smart spending is when you plan smartly and manage to get the most of your needs in a budgeted amount. Some examples of smart spending are buying groceries in bulk or at wholesale prices. This helps you stock up on grocery items whilst saving money. It’s wiser to shop groceries at wholesale stores where you can get everything that you need and also save money over time. Remember, even little savings can go a long way. Another way to spend smartly is to compare prices. This applies to groceries, clothes, entertainment plans, or anything else, always comparing prices and avoiding impulse shopping from just one place. Online shopping and websites make it easier to compare prices for almost everything nowadays. You can also keep an eye on sales and deals to get your things at the best prices.
Invest Wisely
If you are earning, you need to save and if you are saving, you need to invest. Investing your money secures it in the long-run. It also gives you an asset that strengthens your overall financial position. The first thing you need to do is research. Use professional help and advice from experienced friends and family members on your options to invest. Check how much money you have and then invest it accordingly. Its also important to diversify and not put all your eggs in one basket, which means all your money in one type of investment. This increases the risk factor of losing all your money if that investment turns out unfruitful. Also, consider your risk tolerance when you are making an investment decision.
Set Financial Goals
Apart from planning and budgeting, it’s important to set your short and long-term financial goals. What are you earning for? What’s your goal? What do you want to achieve in the next one year? What do you want to achieve in the next 5 years? Do you want to buy a car, a house, or save for a vacation? Everyone has financial goals. It’s better to write them down and revisit them every week or month to know how close you are to it. This will motivate you to save more and spend wisely.
Seek Professional Advice
Lastly, seek professional advice if you are struggling with your finances. This includes taxes, credit scores, investments, and any other short or long-term financial goals that need to be accomplished. Every once in a while, you will need a finance professional who could guide you with your finances. Spend money on a professional or consultant to ensure your paperwork, taxes and every other formality is complete.
So, begin now and use your money better!
