10 Money Management Tips That You need to Start Implementing Today for a

by Rinku Mishra Writer

Scared of what the future will bring? Worried about how to secure your family’s interests while building a nest or planning your retirement? Here are a few smart tips to manage your money the right way and secure your future.

The simple truth of life is that no one can predict the future with accuracy. That’s the beauty as well as the bane of life. Just because you cannot be sure of what the future holds, doesn’t mean you cannot prepare for it.

Knowing how to manage your money better is one of the most reliable and efficient ways to building a secure future, thereby achieving your financial goals. Contrary to popular belief, money management skills aren’t something that one is born with. Just like learning to play a musical instrument or drive a car, it needs to be learned, practised, and honed over time.

Here, we shed some light on the best ways to manage your money today, so that your future is bright.

1. Start by Understanding your Cash Flow

Nothing affects your financial future more than your inability to gain a keen understanding of your current incomes and expenses. If you want to save money for the future, then you have to start by tracking your current expenditure patterns. A simple way to do this is by installing a handy mobile app that lets you add your daily expenses, so that you get an accurate idea of what’s coming in, what’s going out and what’s leftover.

2. Create a Budget

The next step is to create as much of an all-inclusive budget, as possible. Work out all your monthly expenses from the big ones like EMIs, rents, school fees, groceries, utility bills to other indulgences like eating out, catching a movie, etc.

3. Try to trim a few day-to-day Expenses

Once you have a comprehensive budget in place, you can look to identify areas where you can cut down costs. For instance, by estimating your grocery needs for the next month, you can purchase the required items from wholesale stores at competitive prices, instead of buying piecemeal from your neighbourhood store at a premium. Or can you car-pool to work instead of taking your car every day, thereby optimising your fuel expenses. These are just a couple of examples. Sit with your family members and identify areas that could do with a trim.

4. Pay off Debts

This one cannot be stressed enough. If you have mounting debts, then you can be sure that a significant portion of your income is spent on paying interest on these. Here are a few tips on how you can reduce your debt trap.

●        Do not revolve your credit card bills – they come at a high interest cost. Pay off your pending credit card bills in full asap.

●        Thereafter, try to clear debts that have a higher interest rate first, even if it means prepaying in small amounts.

●        Alternately, consolidate all your debts under a single loan which has a lower interest, so that you can save on interest paid month-on-month.

If you’re neck deep in debt, then it pays to work with a debt counsellor, to figure out the right ways to become debt-free.

5. Identify your Goals to Accelerate your Savings

Write down all that you wish to achieve - this includes both, short-term and long-term goals. Then, figure out how much you need to save and the timeframe within which you must save to make your dreams come true. Every month, pay this amount to yourself as another bill that you have to clear off. As Warren Buffet famously said “Income minus Savings equals Expenses” should be your mantra.

6. Look for Smart Investment Options

Gone are the days when a savings bank or fixed deposit was enough to secure your future. With sky-high inflation and abysmally low-interest rates, a regular savings bank or a fixed deposit account is no longer sufficient. You need to look for other smart investment options that make your savings work harder, to reach your financial goals.

7. Try to make the most use of Tax Savings

There are several ways in which you can reduce your tax burden. Make the most use of deductions that you’re eligible for. Work with a certified tax planner, to discover ways to save tax.

8. Insure your Risks

Medical expenses are one of the most unpleasant surprises in the future. Protect yourself from it by taking health insurance for yourself and your family members. Apart from medical insurance, buying term insurance for yourself (the income-earning member) is a must to protect your family, to protect them from financial burden, should anything untoward were to happen to you.

9. Start Building your Assets

Whether you wish to own a home or build a robust portfolio of stocks, working on building your assets, even in small parts, is the best way to secure your future. With an asset, you have the peace of mind, which you can liquidate it or draw income from, to meet any unexpected surprises in the future.

10. Work with a Personal Financial Advisor

Very often, a vast majority of people ignore this crucial step. A financial advisor helps you

●        To convert your life-goals into financial goals

●        Builds a customised financial plan to help you achieve your financial goals

●        Helps you make right investments to reach various financial milestones

●        Offers you excellent money management tips tailored to your specific situation

Securing your future need not feel overwhelming or daunting if you follow the handy tips listed above. Start today to build a bright and positive tomorrow.

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Created on May 16th 2018 02:15. Viewed 521 times.

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