Proper money management is the need of the hour. Once you are able to manage your money, you would be able to lead a peaceful life. Managing money is not rocket science; however, you have to be very smart for it. To help you here, we have listed ten tips to manage your money well.
1. Prepare your Budget and Stick to it
Your budget plays a crucial role in money management. If you haven't made a budget yet, it's high to start with a fresh budget. Your budget will help you know how much money you have in your hand and how much you need to spend it. After creating a budget for yourself, another golden rule is to stick to it. Until and unless you make sure that the budget you have made is ideal for you and you can follow, it will be of no use.
2. Understand your Expenditure
One of the important factors that will help you to prepare your budget and managing your money is having a good knowledge of your expenditure. Once you know where you spent, it will be easy for you to manage your money. List- down all your expenses. Keep receipts and bills of groceries, restaurants, and other places that you most likely visit or tend to spend money. And, later calculate the total money spent. This will help you to track your expenses in a better way
3. Understand your Income
We all are aware of our salaries and the money we earn. There is no hard and fast rule of understanding the income. What's essential is, does your income suffice your expenditure. If it does, then you are utilizing your money in the right way. However, if it doesn't, then you surely gave it to do something in order to manage your money. The easiest way to find out whether expenses and income are in balance is to calculate all your costs and whatever the amount subtract it from your income. If the digit is positive, that is a good sign, but if it is in minus, you surely have to brace yourself.
4. Remove Unnecessary Expenses
Once you know your budget and expenditure, you will be able to evaluate whether the money spent on the particulate thing was necessary or not. For example, mobile, DTH recharge, and utility bill payments are essential expenses you cannot ignore them. Still, there are few expenses such as eating at a restaurant more than once in a week or any other activity where you end up spending unnecessarily. Once you have a hold on all these expenses subsequently work on eliminating these expenses for this, your budget will come handy.
5. Review your Credit Report
A credit report is detailed information about the individual's credit history. If you have paid your instalments of the loan that you have taken in the past from different companies or banks on time, then you would have a favorable credit report. However, if you are incapable of paying the credit bills and other debts timely, then you would not have an ideal credit report. If that's the case, then it could be difficult for you to apply for a loan in the future. There are many financial websites, such as BankBazaar, that help you know your civil score and credit report. You can consider it for taking a loan as well, and do not forget to use BankBazaar coupons to get all the services at a reasonable price.
6. Save for big Purchase
Once you have a hold on your expenses, you can accordingly save them or use them for future investment. It's always advisable to save your money. You never know when an emergency can appear, and you would be devoid of all the money. Hence, it is essential to save money. Not for the crisis, at least keep it to purchase something. For example, if you plan to buy a house in the next 5 years, by now, you should start saving for it. This will remove all the last minute's hassles that might appear while arranging the money and you wouldn't have to lend a larger amount.
7. Restrict your Credit Card Purchase
If you have a credit card, you would most likely pay your dues and bills via credit card since you do not have to pay the money instantly and does not have a restriction. However, in the long run, it proves to be quite expensive for you. Each credit card as different interest value that you have to pay, thus you end up paying more. To avoid this, make sure you pay through debit card, cash, or net banking.
8. Emergency Fund
As discussed above, you never know when an emergency can strike. You have to prepare for even the worst scenario. For such time your savings will only help you. However, if you are unable to save, you can also bank on to the fixed deposits (FDs) or put your amount in the savings account that gives you high interest.
9. Know your Taxes well
You must know about income tax and other taxes that you pay. Known your taxes better help you how much amount in the year or month is deducted from your salary or how much other taxes you pay. This will give you a sound knowledge of your money. Also, you must know how to prepare the annual tax return to avoid ill suggestions
10. Look out for Health Insurance
It's always good to have health insurance. It helps to safeguard your finances, improve your health, and you can go for regular check-ups. Plus, you do not have to pay a higher amount while taking treatment.
Conclusion:
Ideal money management helps you accomplish your dreams and prevents you from unnecessary expenses that, in turn, help you to save the money and use it in a better way.
