Have you ever thought that most of your money you have is being wasted as you don’t have a proper saving money habit? Think of it this way, you can almost double your earnings if you just try and be careful about your saving habits. You can use all this extra money for paying off all the debts which are pending, assimilate them for your future emergencies or even splash it on yourself and have a bit of fun.
The choice is yours, but the fact is you can save a lot of money if you try and be a bit cautious and aware. As they say “Money saved is money earned”.
Here are some of the simple tricks which might help you to handle your personal finances: -
#1 - Have your own budget planned
Creating your own budget is the very beginning of taking control of your wealth. It will act as a storekeeper and have an account for all the money that is coming in or going out of your wallet.
For the initial few days just keep a track of all your expenses. You don’t have to restrain from spending rather just keep an account of all the money that you spend in a given interval. To aid to this save all the receipts which you have, keep a control of all the cash you spend and also the credit card bills which are done.
The main goal is identify how much money you have spent and how much money is left in your account at the end of certain period. Now based on the knowledge about your spending draw a budget about how much money you require for all your expenses. This would help you to limit your wasteful spending. In your budget, create provisions of actual budget and forecasted budget so that you keep a track of the fact where you went wrong.
#2 - Spend less
You should always try and spend in a very responsible and mature manner. You should spend only on those items which are essential for you and try to prevent wastage of money.
For many of us buying a home is the most costly and significant payment which we will ever make in our lives. You need to plan for spending like this carefully. Try and pay the mortgage as much as possible at the earliest which would be helpful in preventing any sort of interest.
The main aim should be to minimize the interest payments and at the same time balance the rest of the spending on your budget. Use your credit card carefully as having a credit score of more than 750 will help in availing very low interest rates and cheaper loan options.
#3 - Invest Carefully
You need to be aware about all your investments as the financial world is much more complicated that you expected it to be. Try and be familiar with different types of investment options which are present in the market.
In the stock market fortunes are made or lost every day. The more you are aware about this financial market the better you will be able to invest all your hard-earned money. The most important part of that awareness would be to know when to back away and when to put your foot down and go ahead.
If you decide to invest in the stock market then always put money on safe stocks, don't try to gamble with it. Most of the novices who try their luck in stock market try to make small gains by spending on day stocks which is very poor choice. While it can provide you with some quick cash the risk associated with it is extremely high and it is more akin to gambling than investing.
If you desperately want to invest in stock market then the safe investment would be in the long term stocks. This means that you have to leave your money invested for more than 5 years. So you need to be very cautious while investing.
#4 - Build Your Savings
An important part of financial management would be to start an emergency fund for your times of need. To have a large expendable income would mean that you do not have many debts. By not having any sort of debts will help you a lot in fighting all sorts of emergencies.
When you have decided to save for retirement and emergency fund then always save for more than a couple of months. If you lose your job or face any medical emergency than some large amount would be required to bail you out when disaster strikes.
Saving your money is an essential part of your life as this will help you in achieving all your goals of the future. So, you always need to be careful while dealing with your finances in your everyday life. It may feel a bit overwhelming at times when you realize that you are struggling financially but a little patience and hard work can help you achieve all your goals.
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