How good are you with money? You ask yourself when you realise it is more than just making ends meet, don’t you? Being good with money does not have to be that you are good with math or requires math skills. It just requires basic addition and subtraction. When you learn about money, it becomes a lot easier to mould into finances and how one has to maintain a healthy financial life. Also, how you spend your money impacts the credit score too. So, if you are struggling with how to manage money, it is time that you improve your financial habits.
Often, in situations, you are faced with options where you have to choose one from the other and end up being decisive about everything. When to spend and how much never crosses your mind if you are not sure about dealing with money. Managing your money suddenly becomes very stressful and may seem like an impossible task if not planned to save ahead of time. Today, everyone wants to keep their finances in order which can be easy. With careful planning, budgeting, smart savings and other basic attention to your income, you can now learn to manage money wisely.
Earning a good monthly salary can often lull you into overlooking the financial growth and future. You may overspend before you even realise that the salary you receive is not permanent. Hence, to avoid such situations, it is advised to take control of your money and lay some foundation. Living becomes much easier when you know how to handle money. And this means, constantly keeping track of your finances, budgeting it and balancing the inflow with the outflow.
Before you could save any money, you will need to understand your basic needs, list them down and work towards saving for it. The list could include, rent, utility bills, groceries, car EMIs, etc. It is highly recommended to construct a concrete plan of the expenses that can be divided into monthly and annual categories. Most importantly, ensure to include everything that you spend on for short-term as well as long-term goals. This should be a good start for you to learn about how to manage your salary wisely.
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In this article, you will further read on how best you can manage to save better.
- Make a budget and stick to it
Most of you do not budget your finances and that is probably the start of going haywire with your money. You might think it is a boring process to list out the expenses, adding up numbers and ensuring everything is in sync. So, if you are bad with finances, don’t make room for excuses and start budgeting your money. It only takes a few hours to work on a plan every month, so why wouldn’t you do it? Instead of focusing on the process of building a budget plan, focus on the value it will bring to your financial life.
- Plan your spendings in advance
Making a budget refers to often reviewing it too. The most crucial part of budgeting includes the amount of income you are left with after you have kept aside some money for your daily expenses. If you have some decent money left, you may use that for fun and entertainment, however, do not overspend it. Before you make some purchases, it is advised that you backtrack the plan and guide your spending decisions, depending on your monthly expenses.
- Reduce your credit card spending
For most of you, credit cards can be a saviour but remember it is also a bad spender’s worse habit. When you are short of cash, you simply turn to credit cards without even considering how you can repay it and how long it may take you to do so. This may create an imbalance in your salary savings and once a habit, always a habit. Try resisting the urge to use credit cards on purchases that are especially not focused on your short-term goals.
Divide your money as per the 50/30/20 budget rule: Rather than to have your budget divided into several different categories, you can consider guiding your money towards the 50/30/20 budget rule. You can narrow down on your short-term and long-term goals, and categorise into flexible spendings, fixed costs and other financial goals. The idea is to keep aside money pertaining to bills and daily expenses on a monthly basis. On the other hand, you can save up some of your income towards retirement and emergency funds to build financial wealth. Following the budget guideline, keep aside 50% of your income for fixed costs, 30% for your financial goals and 20% for flexible spendings that include fun and entertainment, travel too.
- Contribute to your saving account regularly
Despite all the spendings and calculated budgeting plans, try and deposit some amount of money into your savings account every month to build financial wealth for the future. If this seems tough and new, you can even set up an automated transfer option from your checking account to savings account, which will not hamper your current plans if timed well.
- Consider investing in stocks
A little tedious and new for someone who has just started to handle money, investing in stocks can be a great option to save wisely. You need to be an active investor in order to understand the cash flows in stocks and currencies. Learning about online trading offer opportunities can quickly help you gain more money to perhaps, achieve your short-term goals. While investing have its own pros and cons, you can hire a professional to do the trading for you to avoid any complications and risks.
- Ensure you pay the best prices
It is easy to save when you also spend less on shopping and other such engagements. For instance, consider most of your money in paying low prices for new products and services you are looking for. You can also consider discounts, coupons and other codes that can be a great alternative for you to save.
- Get rid of pending debts if any
Clearing off your debts is another way to save up. Debts usually cripple your personal finances and paying them off at the earliest is always a good idea. For example, in order to calculate your loan repayment cycle, you can consider using a calculator to understand how much you are expected to pay in a given period of time.
- Save up for big spendings in the future
While you are creating a list of your short-term as well as long-term goals, it will clearly help you segregate your budget into the purchases you need to do now and later. It will help you better use your money in the right direction which will allow you to make some sacrifices. It will give you the control to evaluate whether you need to make that purchase or not. This way, you are only saving rather than dealing with bills.
- Learn to be good with handling money
It is a common saying that, practice makes a man perfect. In the beginning, saving your income can be tough and may seem like a task every month. You may not be used to planning ahead of time and putting those purchases aside unless you understand the importance and value of money.
In order to live a comfortable life, make these your daily habits and implement them to make it easy for you to manage money. Once you have done that, you are on a better start with your finances.
Aahna Gandhi is an enthusiast traveller, writer and a PR Professional. She likes sharing memorable moments from her travels and inspire others to live a life full of wonder. Known for her content, she has worked for travel, technology, lifestyle, health sectors as well as finance.
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