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How Money Management Can Decide Your Financial Well-Being

Team Jar
December 12, 2022
How Money Management Can Decide Your Financial Well-Being

Your money knowledge determines your financial success to a large extent. To know more about managing your money, check out this article.

Do you feel confident about handling your own money? Or is money management nothing but another burden for you? 

Money-the more, the better! But why is it so stressful to manage it? And most importantly, why doesn’t it stay with you? Well, if you do a thorough check of your money management skills, you’ll know what’s lacking. 

Your financial well being depends on how you manage your money. Ironically, people confuse management with hoarding money. It is not so. Ever heard the phrase “the more firmly you hold sand, the more it slips out of your hand”? 

Money is no less than the slippery sand. You don’t need to hold onto it, or else you'll lose it too  quickly. For instance, consider keeping all your money in your locker. What would happen after some time? Inflation will excel at its job of eating up your money’s value!

Instead, put it in the right place- invest it and try to earn a good rate of return. 

That’s the only way towards financial freedom. Understanding the flow of your money is the first and foremost step of financial management. When you have money, make sure that you track it. How? To help you better, here are some tips to boost your financial game. 

Here’s How You Can Manage Money and Attain Financial Wellness

1. Develop Good Money Habits- Take Calculated Risks

With good financial habits come ample financial gains. You can swear by this line and focus on developing some decent habits. One of these prominent habits is saving regularly. Yes, read it again- save regularly. Only if you save, you will have money to invest and secure your future. 

Next, in case you mostly use your current account rather than the savings account, don’t forget to set alerts for it. In order to avoid spending too much or going overdrawn, you can set alerts for whenever your balance gets low

If you are a credit card user and you know that this time it will be difficult to pay the bill, immediately contact your creditor. Make sure you do it before the due date to know what options might be available. 

Lastly, if you are seeking a loan, make sure to get quotes from at least three different lenders. You may land your hands on a loan with lowest interest rates! 

2. Credit Cards? Apply Only if Necessary

Credit cards are sleek rectangular pieces of surprises. On one hand, they can help you with easy transactions, extra access to facilities like discounts on tickets, a good credit score, etc. 

But if you fail to pay the dues, the situation gets ugly as your balance starts to accumulate. Different types of fines could be imposed, and a debt trap can wipe out all your savings. These fees and fines can pose an additional burden on your money- definitely not  good for it. 

This makes one wonder if all the luxuries that knock on the door when buying a credit card are actually worth it. They may be the case as long as you do justice with payment timings. But if your financial health is already compromised, you must refrain from this burden. 

Only if the credit card sits right with your budget and money should you invest in it. Otherwise, cash and debit cards are equally amazing transaction options. 

3. Avoid Unnecessary Bills and Invest in Emergency Funds

The above-mentioned unnecessary bills (for instance, an additional overdraft fee) must be avoided at any cost to save some extra bucks for a good investment. 

Even if you are not an insurance enthusiast, you should buy it. The reason is pretty simple- why would you let your money go down in hospital bills or in the repair of a damaged vehicle? Or why would you risk the future of your family, especially if you are the sole earner? 

When all this can be taken care of by a simple policy measure, you ought to do it! Never ignore these emergency investments, as a large part of your future financial stability is dependent on them.

Also, apart from insurance plans, for emergencies, you can maintain a separate savings account that can fetch you the benefits of compounding. And,, if possible, you can make gold investments- gold being a fantastic option for emergencies!

4. SMART Money Management Technique

If you find it difficult to decide what to do with your money every time you receive your salary, here’s what to do: fragment it. 

Breaking down your money into different amounts for different things can sort things out for you. For a simple technique, we suggest you follow SMART (Specific, Measurable, Achievable, Relevant, and Time-bound). 

To achieve your financial ambitions, this technique can give you an edge over other plans. Each word signifies what you’ll do with that money. For instance, in the case of S, your money is targeted for a specific goal like buying a house. What percentage you allot to each will depend on your aspirations. To turn your vague goals into reality, make sure you follow such plans. 

5. Plan Ahead of Time

This might sound very vague, but it is possible. Once you feel that you have a good handle on your finances, you can start to map out your future goals and purchases. Here, we mean big purchases that will make you spend extra time saving for them.

For these goals, you may have to carry out separate investment plans. So, if you have any such goal, make sure to get started right away! 

Money management is very crucial for a financially secure future. The better turn you’ll give it, the more profits it’ll fetch you. Remember this: It is necessary to know about your money. From where it comes, where it goes, what you spend on, how much you can save,  etc., are all necessary to know before you plan to attain financial freedom. 

Download the Jar app to start investing in digital gold with just Rs. 10. You can earn daily spins and double your investments! Plus, Jar round-offs your spare change and directly invests the difference in stable gold investments. Start your micro-saving journey with Jar today!