It may seem to you that you are in control in most situations. May be true till you start thinking of money and dig deeper till you hear yourself saying ``I know where my money is going.`` Do you spend time worrying about money and how you never know where it is being spent? Well, join the band wagon as most of us are still trying to see what money means to us and how we should manage it better.
5 simple things you can do to take control of your money life:
1. Budget: Prepare a budget for the month/ year and stick to it. Do not prepare strict budgets, allow for some splurging and some emergency fund as well. An annual budget would help; as you could add the festival expenses or any other annual expenses that you have.
2. Control debt: Leave the credit card at home when you go shopping. Well you may be wondering if you just read it correctly. Cash shopping once in a while is good, as most people feel the pinch when they pay hard cash and not when the credit card is swiped. Make your payments on the cards prompt and in full. Don`t take personal loans (as it has the highest rate since it is unsecured) for buying assets that depreciate (like TVs, music systems) which means personal loans for shopping is a strict No.Whether it is for your Jimmy choos or the latest Touch Screen phone you want to update to.
5 simple things you can do to take control of your money life:
1. Budget: Prepare a budget for the month/ year and stick to it. Do not prepare strict budgets, allow for some splurging and some emergency fund as well. An annual budget would help; as you could add the festival expenses or any other annual expenses that you have.
2. Control debt: Leave the credit card at home when you go shopping. Well you may be wondering if you just read it correctly. Cash shopping once in a while is good, as most people feel the pinch when they pay hard cash and not when the credit card is swiped. Make your payments on the cards prompt and in full. Don`t take personal loans (as it has the highest rate since it is unsecured) for buying assets that depreciate (like TVs, music systems) which means personal loans for shopping is a strict No.Whether it is for your Jimmy choos or the latest Touch Screen phone you want to update to.
3. Don`t leave it in the bank: Money left in the bank is equal to money spent...you may ask how? Well, with net access and ATMs giving you the latest balances every minute, you tend to keep seeing the money and then, spend it. Instead invest in short term/ liquid mutual funds which are highly liquid; encashable at a day`s notice. What you don`t need for the next 2 years+, start investing in longer tenure say 6-18 month FDs which are multiple(ie. Some amount in each tenure FD) so that you don`t have to break FDs if you need the money, it matures automatically.
4. Insurance: If a person has dependants, he/she must take life insurance. The type, quantum and term will depend on the requirements of the person as that is unique to him/her. However, it does make sense to take life insurance early on in one`s life for 2 main reasons- it is affordable now and scaling down is easier later rather than scaling up and that his/ health is good today, may develop conditions later where he might get rated up later on.
5. Equities: A small portion of your monthly savings can start going to equities via SIPs in diversified equity mutual funds. The start can be as small as Rs 500; being young you have time on your side, which gives this money time to compound. The power of compounding is one of the best gifts you can give yourself. This should stay invested for 5 years+ so that you actually see growth here.
Follow a few simple steps, to attain financial freedom..
4. Insurance: If a person has dependants, he/she must take life insurance. The type, quantum and term will depend on the requirements of the person as that is unique to him/her. However, it does make sense to take life insurance early on in one`s life for 2 main reasons- it is affordable now and scaling down is easier later rather than scaling up and that his/ health is good today, may develop conditions later where he might get rated up later on.
5. Equities: A small portion of your monthly savings can start going to equities via SIPs in diversified equity mutual funds. The start can be as small as Rs 500; being young you have time on your side, which gives this money time to compound. The power of compounding is one of the best gifts you can give yourself. This should stay invested for 5 years+ so that you actually see growth here.
Follow a few simple steps, to attain financial freedom..
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