- Posted by CERC India
- Posted in October-2019
Money management advice you cannot ignoreÂ
Being good with money is not just about meeting all the expense. It also means preparing for a secure future and any eventualities. These simple tips will help you manage your money better.
- Choose your investment based on your goals:Break your goals into short term, mid-term and long term and then choose an investment option accordingly. This will help you figure out what time duration you have to fulfill the financial need to achieve your goals.
- Invest in different options: When you diversify your investments between different options you minimize the riskÂ taken.
- Every drop counts: You may not be able to save and invest in big amount but that doesnâ€™t mean you stop investing. Being regular in investing is very important to ensure good returns.
- Everyone has different needs and goals and so investment options cannot be same for all.
- Listen to financial experts but donâ€™t follow them blindly. Do your research
- Don’t follow financial advice blindly:Â You may be confused by the various options available and so taking advice from experts on what to choose is necessary. But donâ€™t follow the advice blindly. Do some research yourself, ask questions and clear all doubts, read the documents carefully. Also ensure that your financial advisor is approved by the regulator.
- Create emergency fund balance: No amount of systematic planning can be successful unless you factor in the possibility of an emergency situation. Loss of employment, health issues, stock market crashing may change all your plans. If you have set apart a considerable amount for any unforeseen incident, the financial burden will be reduced.
- Clear your credit card bills: Using credit cards has become a matter of convenience. The monthly bill mentions only a small portion of your entire bill as minimum amount due. The rest unpaid amount is then charged with heavy interest rates. It is thus advisable to pay off the entire bill amount every month.
- Have multiple cards: It will be helpful in monitoring your expenses if you have separate credit cards with lower credit limit. You may keep one card for your monthly bill payments while another one for online purchases. This way you will not only limit your expenses but also your risk will also be reduced in case of loss of a card.
- Have a plan for your unexpected income: You may get an additional income from bonuses, tax refunds, annual raises or side income. The cleverest way to use this money is the rule of one-third. Divide the entire amount into 3 parts and use one part each for splurging right now, loan repayment and longer-term savings.
- Understand taxes: You may have someone who manages your tax accounting and filing but it always good to understand the income tax structure and options where you can invest to get tax benefits.
- Create a financial calendar: You probably already do this but not in a systematic manner. You know that you have to make investments before march for tax saving. You have to make provisions for school fees, new uniform, books and bag when the academic year begins. It will help you if you mark all these in your calendar so that you can plan the expenses accordingly.
- Check your statements regularly: Donâ€™t just file away your monthly bank or credit card statements. Check each transaction. If you find any discrepancy immediately bring it to the notice of the bank and get resolution for it. This habit of checking will also help you keep track of where your expenses and how you can save.
- Eliminate Recurring & Unnecessary Expenses: Ensure you are only paying for what you need. Eliminate unnecessary and recurring expenses no matter how small you think they are.
- Choose the right insurance: The basic purpose of insurance is to cover risks in your life, not offer returns. Still, most people confuse it with investment because of the products in the market that offer both.Â Evaluate your need, explore all the options available and select a plan best suited for you. This is true not just for life insurance but also health insurance.
Source: www.rd.com, www.awealthofcommonsense.com, www.financialexpress.com, www.businessinsider.in