10 Best Money Management Tips
July 12, 2017
Hectic jobs, busy schedules through the week and no time for self, means that our personal finances take a back seat.
To ensure that you have the essentials covered, we have designed a 10-week action plan for you. Just one task every week for 10 weeks (most of them do-able in just an hour on the weekend) will ensure that you are feeling at the top of your finances.
- Start with automating your bill payments: Rent, electricity, WiFi, cable bills are monthly affairs. Do away with manually paying off each by setting an automatic debit instruction. This one task takes this mundane monthly activity off your plate and you can focus on the more important or interesting things.
- Reduce the number of bank accounts that you have because one bank account is all you need: Your task for week 2, is to consolidate all your bank accounts into one and make your life easier. This will help you see all of your savings in one place and know exactly how liquid your money is.
- Third week task is to reduce your credit cards to one. This exercise helps you use only one credit card for all your bill payments and other expenses. This removes the task of keeping tabs on multiple card statements. Besides, having only one credit card helps you pay off the debt every month on time and avoid falling prey to the vicious debt cycle.
- Your next task is to calculate how much do you owe in terms of loans and debts to other institutions, to arrive at your personal net worth. This will indicate how financially sound you are. Outstanding credit card bills, student loans, car loans, home loans or any other personal loans - make a list of how much do you owe and how much time do you have remaining to pay it off.
- Once you know how financially sound you are, you need to check if you have the right health insurance plan in place. You need to get this for your family (dependents) as well. Along with safety from health hazards, getting insured also gives you tax benefits.
- Once your health is secure, get on with financially cushioning yourself with Rs. 1 lakh. Make this your SOS fund that you invest in debt funds and do not disturb, for random expenditure. Strive towards creating this fund, in your week 6. This amount will give you the peace of mind you didn’t have earlier.
- After safeguarding your loved ones and yourself, you now need to communicate the same to them. Make sure your family always knows where all your money is. This will help them assist you, should you be in a difficult situation and do not have access to important documents.
- In week 8, start with insuring your life. Understand the difference between term insurance and life insurance. A good rule of thumb is to insure for 300 times the monthly amount you need. Stay insured, stay safe.
- After most of your familial responsibilities are taken care of, you need to focus on getting the optimal usage of your income. Start saving taxes by investing in ELSS funds to get maximum benefit from your investments, as compared to other tax-saving instruments.
- You have a pretty much taken care of all your responsibilities at present. It’s time to plan ahead and think of retirement. If you haven’t started already, you’ve got to start right away and start putting money aside for your old age, when you would be retired and your money would be facing inflation.
- These tasks will get your finances in order for a long time to come. The time you then save and the money you invest well, will help you enjoy the finer things in life and attain peace of mind, along with financial security.
Disclaimer
ABove shared views are Personal Views of author and he hold NO responsibility of any information provided or any authenticity or validation or of any damamge harm caused due to such information. Discretion of reader and apllication of reders own mind is highly advised.
0 comments