Money management is the key to a financially stable future. To achieve your financial goals through smart savings and investments, check out this article!
Financial influencers are highlighting the importance of managing money effectively, Including how to generate multiple income sources, practicing effective investing, and striving for FIRE (Financial Independence, Retire Early) lifestyle, to secure a financially stable future.
The spread of hustle culture is adding fuel to this money making fire! But, besides setting plans to earn money, do you really know how to actually manage it?
Money management is supposed to be your prime focus if you wish to save and invest efficiently.
You may have lots of money, you may be investing actively, or perhaps your savings plan is the best, but if you lack the ability to manage it all, there will hardly be any difference between you and a mediocre earner.
One thing that sets the basis for the importance and relevance of money management is the need for long term stability and liquidity.
Remember, you can’t rely solely on creating wealth in order to build a financially secured future- how you manage and protect your funds and make use of them prudently is equally important.
To set a strong foundation for the control of your finances, money management is the key.
If you are confused about where to start, here we have listed some of the most effective ways to manage your money:
1. Create a Manageable Budget to get a Kick Start!
Setting up a manageable budget plan is the first step towards effective money management.
As per your needs and wants, you can decide on the amount of minimum money that you will need every month.
While tracking your spending habits based on your lifestyle, it will be easier for you to separate the necessary ones from the superfluous ones.
If you realise that you’ve been spending money on something too reckless, you can cut it down.
You may not even have to alter your lifestyle in order to achieve your financial goals.
Just a little awareness of your spending habits and you will find it easy to set a base for your financially secured future without compromises!
2. Save first, Spend later
When you first start out with financial planning, ensure that instead of just straight away spending your monthly income on your needs and wants, you keep aside some part of it as savings.
It will be easier for you in the beginning since your willpower will be at its finest! Plus, soon it will become your habit and you will be one step ahead of your financial goal.
Keeping aside some part of your income will also ensure that you don't overspend it or exceed your budget. Even for future financial contingencies, saving first and spending later is important.
3. Make sure to set achievable Financial Goals for the Beginning
Setting an achievable financial goal will ensure that you stay focused. Make sure that your goal is not too unrealistic, especially if you are a beginner.
For effective money management, you must determine what to do with your money in the short term as well as in the long term.
Well spent money is the only way to help with your financial well being.
For your goals, like your own house, your child’s education, early retirement, etc, you will have to make smart investments in some profitable financial products.
If you want to add extra zest to your portfolio, you can even set timelines for your financial goals. This way, you will be able to achieve them faster.
4. Don’t run away from Investing early
The sooner you start to invest, the more profitable your returns will be. Since you will be in the market for an ample amount of time, this long span will be enough for you to grow your wealth tremendously and invest in some of the most profitable but time taking financial products.
Also, for your long term financial goals, it is crucial for you to start investing earlier.
As a beginner, it can be quite intimidating for you to take on risky ventures. Therefore, make sure that you balance this risk with some stable investments. Investments in digital gold, NPA, etc. are safe investments.
You can mix some of these with risky but profitable equity investments and create your own well-balanced portfolio.
5. Prevent accumulation of Debt
Many times, you will come across situations where taking a loan to achieve your financial goal will seem captivating.
However, we suggest you stay away from such illusions. You may be able to pay the debt, but what’s the point if the high interest rates eat up all your savings?
In addition, a loan will be a red mark on your credit report making your credit score drop- making it tougher to seek a loan in the times of actual necessity.
Therefore, you must avoid getting trapped in debt. Relying too much on a credit card or taking too many loans does nothing but add to your financial burden.
6. Create an emergency fund
Lastly, any financial planning is incomplete without an emergency fund. To prevent uncertainties in life, you are required to plan ahead- create your emergency fund as soon as possible.
While you do so, you must make sure that it is enough to help you survive at least 6 months if any financial calamity pertains.
If 6 months is too much, at least 3 to 4 months worth of emergency fund is a must for any person.
Your goal while setting up funds for emergencies is to focus on your actual needs and NOT the wants.
A well structured emergency fund always contains life insurance, health insurance, vehicle insurance, etc. along with the necessary liquid currency.
Investing in Gold is also a good idea for an Emergency Fund. Gold Investments are still one of the safest Investemnts ever and with the Digital transformation it's more beneficial.
Money management is a tiring but interesting task. Your financially secure future directly depends upon how effectively you are able to manage and spend your money.
In order to ensure that your money is going in the right direction, you can even seek help from online saving and investment tools and apps.
Download the Jar app today to get easy access to digital gold investments. With the Jar app, you can start investing in digital gold with just Rs. 10! Make your spare change change the financial game for you. Try out the Jar app today!