Nobody wants to manage their money bad, well, that doesn’t sound right and it’s not a good thing to do either. However, many of us don’t pay attention to it and that’s why we suffer. If you are someone who is failing big time to manage their money then here are some tried-and-tested ways to overcome this bad habit.
Managing money will take time to understand but it’s not an impossible task to do at all. Yes, you will need commitment, but with time you will be able to manage it properly. Here are the top 10 steps to follow to manage your money.
Always plan your budget
How many of us actually sit and prepare a budget? Creating a budget might seem tedious at first, but once you get a hang of it, you will understand its importance. Money management starts with budget planning. This will give you an idea of the money you need to spend on your debts and the amount required to survive the entire month.
Think about your expenses and try to understand
When you ask someone about how much they spend on a monthly basis, the most common answer you are about to receive is all of it. There lies the problem. We don’t know where all the money is going. First things first. Keep all your receipts in one place. They can be of anything, your grocery bills, utility bills, medical expenses, restaurant bills, etc. Always remember to track your expenses. Maintain an excel sheet and keep updating it. This will give you an idea about your recurring expenses and the miscellaneous expenses too.
Know your income
You should always know how much you are spending and what is your monthly in hand take away. Calculate these two and the result will be the amount you can save. Remember your expenses should be lesser than what you earn. If you are spending more, then it’s time to control it.
Consolidate your debt
No one likes to be on debt. Take a look at all your credit card debts, home loan, personal loan, education loan, and try to get it consolidated to get a lower interest rate. It’s better to pay one loan and get rid of multiple debt accounts. Ultimately, it’s about taking control of your money and to know how to consolidate your debt will help you manage your money better.
Remove unnecessary expenses
You know what we are talking about right. If you know you are running low on money then it’s better to skip your favourite Starbucks for a couple of months. Take out all the receipts of your visit to the nearest Starbucks and calculate all of them. You might be spending Rs. 1000 a month but in total, you are spending Rs, 12,000 a year. Now, that’s actually an unnecessary and avoidable amount for sure. Also, take a look at the subscriptions that you have been paying for and not really use it, if you have something like that, then it’s time to say goodbye to them as well. You need to manage your money and with baby steps, you will be able to do so.
Always create an emergency fund
By emergency fund, we simply mean the fund that you will need during some unforeseen circumstances. Anything can happen and only the emergency fund can help you during that time. What if you lose your job or someone close runs into an accident? What will you do then? It’s better to be safe than sorry.
Save for your retirement
Retirement might sound a little off right now, but if you plan before then your retirement is surely going to be a fun ride. No one likes to be dependent and the sooner you realize it, the better it is for you.
Review your credit report regularly
Your CIBIL score is direly important. CIBIL will either get or reject a loan during an important situation. Hence, don’t let it get affected.
Download a personal financial app
There are so many reliable financial apps available on the internet. Make use of them. Download one today to keep track of all your expenses. These tools will also give you an insight into your expenditure versus your income.
Being able to understand your finances will let you live an easy life. No one likes to go through money problem and hence follow these easy steps and live a better life. This will save you from a future headache too. Personal financial management is important, not just for you, but for your family too.