Tuesday 18 November 2014

Give your money the respect it deserves

I admire people who handle money wisely and plan financial things properly. To live an independent and comfortable life, financial stability is a must. Showing respect to money means understanding its value in true sense and using it wisely. The way you use the money shows how respectful you are towards it.

These days, most people I know don’t have a financial plan. We spend a lot of time planning for other aspects of our lives, like  careers, marriages etc, but many of us actually don't know how to make financial goals and plans.

I have felt that if we keep track of our expenses and sticking to a budget, we spend less and save more money.

I am sharing some tips I learnt from others and my own experiences which I think may be useful

Create a monthly budget

There may be expenses which need to be settles on a monthly basis and on a term basis like building tax etc. Prepare a proper budget and keep money for each expense. Keep money  for all different expenses and keep them in separate envelopes.

Keeping an excel sheet would also be a good idea. Note down all sorts of incomes and expenditures.

Whenever a new bill comes, take note of the due date and record it.

Pay all the bills before due date to avoid fines.

Start with saving a fixed percent, say 10% of your income each money. Every time your income increases, increase the savings also.

Now since there are online facilities you can pay all of them easily. Keep a separate account and transfer some reserve amount to it monthly and pay all the expenses with it.

Keep your tax receipts and other bills in separate files

Don’t buy cheap stuff to save money, buy good quality stuff that will last long.

To keep yourself out of the grocery store and spend less, try to shop only once per month. Go to the store always with a list. When people shop more often, they buy more stuff. Resist the temptation to buy items that are not on your list.

Don’t waste electricity, water and gas in the house.

Teach your children also value of money. Don’t spoil them by buying them everything they want.

On occasions where you need to give gifts, buy creative and useful ones than expensive stuff. When you plan a gift keep a budget for it also in advance.

Those who doesn't spend it wisely will have to regret later. Emergencies may come anytime. Instead of running then it would be better if we could plan properly.Make sure if you don’t have work for some time you have the finances there to support you. If you have a goal of reaching financial independence in a certain amount of time then you will find all ways to achieve it.

Small changes can make a big difference to your bank balance. Do share your tips also.

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