“It’s not how much you make, but how much you keep” and that ideally brings a difference in your living after all who doesn’t love money? Tired of calculating bucks at the end of each month? Confused about your daily spending where you don’t even realize the places you have ideally been spending money? Do you feel exhausted at the end of every month waiting for your next salary to be credited? Welcome to the broke zone of half the crowd. But no worries because we have got you an edge-breaking solution to keep your wallet full and bank account sufficient. Bringing to you 7 steps to manage your finances and keep a check on your spending like a pro.
1. Know where your money goes
We always hear a statement “all my money goes into shopping and eating”, can you relate from this? If yes, you are in serious need to keep a check on your spending on a day to day basis. Can you expect to ace, or for that matter even pass the examination without preparing for it (you can’t always get lucky)? Same is the case with your hard-earned money. Put in extra efforts to take a not on your day to day spending, analyze your unnecessary spending involved and try upon changing your habit to keep your wallet full and save money for the greater good.
2. Understand your income and expenses
You need to understand that you can’t demand a cappuccino at the price of a half tea. Keeping a balance between your income and expenses and bring a noticeable change in your money saving pattern. To keep a systematic flow of money firstly, set aside your necessary spending such as rent, grocery, add-on expenses etc. secondly, keep some percentage (15 % recommended) as you are saving, and the remaining amount can be spent on your luxuries according to your needs. This money segmentation ensures that your expenses are covered without getting a hole in your pocket. With add-on benefits, you have some savings too. When your income is in sync with your expense and your spending is minimized your life sorted while your bank balance loaded.
3. Follow money management resources
You can easily get access to a wide range of money management resources online and incorporate them into your daily lives to be prepared for any financial situation. By managing your money resources online and app-based can help you in keeping a constant check on your earnings and spending, the interest rate on it and the probable saving towards your targeted limit/date. You can access these resources to systemize your money saving policies and give a definite structure to it while keeping the statics intact and prepared for the financial situations throughout your calendar.
4. Have both short and long-term goals
If you are keeping your spending intact to pay your bills at the end of each month, it’s your short-term goal whereas saving money to enjoy your retirement is a long-term plan. For a balanced life, it is advisable to take a short yet calculated step and minimize the risk of breakdowns. Set both short and long-term goals for saving money and keep yourself motivated and be positive to achieve the goals to lead a better life. If you are looking for a more systematic approach to achieve a long-term systematic goal you can invest in mutual funds and LIC’s. For short-term goals, keeping a track on the budget and segmenting it according to your necessities is the most ideal approach- because shorter steps let you cover a longer distance.
5. Cut unnecessary spending
Look around your room, how many things did you notice that lies in various corners of your room without an identity and any fruitful use? To be honest they are quite a lot in number and why did you buy them has a big question mark on it. Cutting down on these expenses can relatively save a lot of bucks in your day to day life. Such as keeping 20 pairs of shoes can be a luxury, but it counts in your unnecessary expenditure. If you are determined to save money on both long and short-term basis, the first thing that you need to do is minimize your luxuries and focus on necessities. When 2 pairs of shoes can serve your purpose, the cost of 18 pairs can be directly transferred into your saving account. Isn’t worth giving a thought?
6. Say no to bad habits
Can you ever create a tasty dish with the wrong ingredients? Similar, creating a happy and healthy life with unhealthy habits can never bring prosperity and well-being in your life. If you are indulged in any sort of bad habits such as smoking or drinking- it’s time to bid farewell to them to save money and your life. On the other hand, it’s quite obvious that refraining from your addiction day isn’t possible and you need an alternative to cut it down. If you are a smoker and spend nearly 20% of your monthly earnings into smoking, you can quit smoking slowly and gradually with the help of e-cigarettes that is less harmful as compared to the ordinary cigarettes. Adapt good habits and look for alternatives to bring positive air in your life.
7. What will be your next step?
Saving money isn’t just a choice, in fact, it’s a necessity. Realizing the fact in the initial stages of adulthood can effectively work in your favour where you can channelize your mind-power and energy into earn and save rather than wasting your bucks on your parties and ‘uncalled for’ luxuries. Remember, financial emergencies come uninvited and bucking up for these in a real-time situation is a challenge. If you synchronize your spending with your necessary goals you are sure to tackle all your emergencies while keeping a good amount for your future endeavours. Choose a way that looks fascinating but might eat you up from inside or rather switch to the direction which looks comparatively calm, relaxed and ordinary. Manage your money or let your money manage your life- your choice.