6 smart money management tips for beginners
When we come across jargon like money management, most of us tend to imagine big, successful corporate companies. However, in today’s world, it is imperative for each and every individual to efficiently manage their finances because this paves the way to a better financial future.
How can I Manage Personal Finances and Save Money?
If you are looking to manage your finances successfully, you need to be aware of several personal money management methods. Here are a few useful money management tips for beginners to follow.
1. Create a Budget
Develop a habit of maintaining a budget to handle your monthly expenses. Doing this routinely lets you keep track of all your transactions and gives you the lowdown on your basic spending patterns. This will also help you avoid certain unnecessary expenses that pop up along the way. So, when you make a budget tracker, make sure to include all household bills, insurance premiums, personal care items, one-time expenses, etc. Also, plan your expenditure so that it stays within your income range.
2. Save! Save! Save!
One of the most popular money saving tips is that it is never too early to start saving. Stick to the basics, start small, but keep increasing your savings. Over time, try and turn this into a habit. Set saving goals, segregate them into two categories, namely short-term and long-terms goals, and save accordingly. If you have some savings and are looking to maximise your wealth, opt for a fixed deposit. NBFCs like Bajaj Finserv offer Fixed Deposits with easy online access.
3. Establish an Emergency Fund
Having a contingency fund is absolutely critical to your financial well-being. Instead of ordering out every weekend or watching a movie every Friday night, deposit that money into an emergency fund. This will equip you with much-needed funds during crunch situations.
4.Avoid Unnecessary Debts
Debts can hang like daggers over your head. The best route to take is to avoid them. Pay for groceries with your debit card instead of your credit card. This will ensure that you spend only the amount you have at your disposal. This will also stop you from accumulating credit card debt. If you already have debts to pay, begin by clearing debt on loans with the highest interest rate. You can also choose to consolidate your debts. Lenders like Bajaj Finserv offer Personal Loans of up to INR 25 lakh with instant approval.
5. Invest and Build a Portfolio
Aside from your savings and emergency fund, save some money to invest in mutual funds, bonds and stocks. Several financiers like Bajaj Finserv, offer Mutual Fund investments with low transaction costs to help you out. These avenues tend to provide you with high returns. However, these are all high-risk ventures. So study the market in depth, understand each product and pick up useful money management tips before investing.
6. Prioritise Your Interests
For instance, if you love travelling, work on a travel fund rather than buying expensive gadgets you rarely use. You may eventually spend this money but it will be on an experience that you value more and on a task that you think is more important. Thus, putting your money where your values lie is an important step towards effective money management.
These simple money management tips will get you started towards financial freedom. It may take some trial and error to get things right, but with enough persistence you will ultimately reach your goal.