How do you save money that you have earned or inherited or even to you as a gift or allowance? What is most important, is the will to want to save. If you get an advisor, then you are on your way to good savings, provided you heed the advice. Else, one learns based on the needs and desires one has. Also, to tide uncertain times that the future might hold, it becomes important to keep a pool of money aside. Let’s look at some simple steps to manage the money that one has:
Manage your money
Managing one’s money need not be a dull task. All it requires is dedication. Deciding to save is the initial step towards finance. Conserving cash can be an effective tool towards higher financial self-reliance. For instance, just think of a situation where you need to borrow money from a friend for an emergency. But there could also be situations where there is no ‘friend’ who can help you. Swiping one’s card may be the easy way out but you can’t do this every time. Simply because you can fall into a debt trap. So, what is the best way out? Plan. Got your salary? Immediately segregate under various categories — medical, insurance, rent, etc. However, set aside 10% of your revenue each month for that ‘emergency’ situation. That’s it. Set aside 10% of your earnings. Now don’t deposit that in a savings account as it does not fetch any returns. Consider investing in a fluid fund. The liquid fund is a kind of financial obligation mutual fund which spends money in fixed-income creating tools like FDs, industrial paper, certification of down payment, etc. around 4%. Conserve every month and on an ongoing basis. See the magic that is revealed at the end of the tenure of these schemes.
If you are living paycheck to paycheck, perhaps, there are many unintended expenditures. Avoid this by making a budget. Unless you have a plan before your eyes, you won’t be able to control your capital. A spending plan merely demonstrates how much cash you have available in your hands and just how those funds are spent.
Managing surplus money judiciously
Surplus money can be used to make you economically self-dependent. If you do not invest, your money won’t grow to connect the inflationary gap. Investing need not be a hard and also boring job. Goals that need a horizon of three-five years are called medium-term goals. After recognising your goals, you can easily pick the financial investments that match them. On the other hand, a risk-averse temporary financier may go to a liquid fund or a well-balanced …….