Are you distressed by the growing need to manage your finances sensibly? We’re here to help you do away with roadblocks to money management.
If you command a decent earning every month but find yourself crawling from one paycheck to another, give this article a read.
While you might argue that money is not all-important, having enough money ensures that you are financially stable and independent. It’s easy to let your finances go unchecked but in all probability you’ll be left with a big, gaping hole in your pocket in the middle of the month. Just as you plan your life ahead, why should your finances be ignored?
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We’re here to help you save for a rainy day, grow your wealth, and at the same time, make the most of your paycheck. And here’s food for thought, think of the goals that you haven’t been able to achieve due to the lack of funds.
We’ll show you a few ways to set aside money for your goals without damaging your monthly budget. The answer to your problems is ‘fiscal discipline’!
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Square One: Tracking
Tracking your spending can solve half your problems. Wondering how? Most of us are in the habit of spending exorbitant amounts on stuff that we don’t even need in the first place.
While small amounts spent on impulse purchases might not seem quite problematic at first, they can add up to a world of pain and stress when accumulated over time.
Reviewing and categorising your spending will help you trace patterns. Keep track of the money you spend and record what you spend it on. At the end of the month, or after about 4-6 months, you’ll not be able to overlook the patterns.
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Budgeting
Once you’re convinced of the need to track your finances, start by budgeting. Your mantra should be spending less than what you earn. We understand that it might now be easy at first.
Begin by paying close attention to what you’ve been spending on and use the data to set a fresh budget in place, one that is aligned to your saving needs.
If you’re a novice at budgeting, figuring out the best possible use of your money can be quite intimidating. For starters, try out the 50-30-20 rule that most financial planners swear by.
The 50-30-20 rule reserves 50% of your income toward necessities and fixed expenses such as rent and utility bills. Your loan Equated Monthly Installment (EMI) payments, Insurance premiums, and Credit Card bills will be covered under this category of defined expenses.
20% of your paycheck is directed to financial goals. This includes paying off debt or saving for retirement.
Finally, 30% of your income can be allocated to optional expenses or wants such as your dining or entertainment needs. Remember that with these expenses you can exercise a certain amount of control regarding how much to spend on each.
Once you’ve perfected the art of budgeting and have succeeded at saving a significant sum, graduate to a more customized budget that’s more specific to your needs.
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Investing
Once you fall into a way of allocating funds for various purposes, it’s time for you to consider ‘investing’. Besides saving a sum of money each month, it is also crucial to invest your money in channels that have sufficient rewards with time.
If your money is just left idle in your bank account, it doesn’t grow in value over time. With inflating prices, it’s necessary that you build wealth over time to make the most of your savings.
The first step on your journey to becoming a seasoned investor is understanding your risk-tolerance. Simply put, it’s the amount of money that you’ll be able to safely invest without your finances tanking in the event of market volatility.
Once you’ve determined how much risk you can take, begin by choosing an investment vehicle such as Mutual Funds or Fixed Deposit. While Mutual Funds are subject to high market risk, Fixed Deposits are a low-risk investment avenue.
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Following these hacks over a period of time are sure to yield results. Once you see the benefits of managing and taking charge of your finances, you’ll be amazed at the benefits you have over the years. Not only will you have a secure future, but you will also be able to direct your finances to setting up a Life Insurance cover.
Managing your finances can be a tough nut to crack! But with BankBazaar at your aid, it no longer has to be a nerve-racking exercise. Think of your money as something you can manage and multiply. With these financial habits, you’re sure to have sound financial health.
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We’re right here to make your money matters simpler and help you access the right financial products. Credit Cards, Personal Loans, Car Loans or Home Loans – we’ve got all your needs covered and that too, all under the same roof!