When the prices of commodities are booming and expenditure is
increasing in every manner, it becomes essential to make some planning
for your income.
• The best way to take care of your money is to plan a budget. A budget
should keep a track of all your expenses. The indispensable expenses
like education fee of the kids, the bills, the fuel, taxes etc. should
be estimated and subtracted from the monthly salary. Then monitor the
other likely expenses like gifts on friend’s birthday in that month,
your anniversary, weekend outing and the like. The amount that is left
after reducing the essentials should be planned in such a manner that
you end up with little, at times even negligible savings.
‘A Penny saved is a Penny earned’. Savings are very crucial in today’s
life. But many people do not understand the relevance of savings. An
individual, who develops the habit of saving money, never falls short
of it especially in exigency situations.
If the outlay outweighs the income, situation is called a negative cash
flow. In this case you ought to be extra vigilant while spending money.
Try to reduce the weekend trips, partying at home or outside,
purchasing needless items etc. If possible make a new budget where you
have optimized the costs. It then becomes your duty to abide by this
budget in order to avoid pitfalls. While if the case is other way round
i.e. the cash inflow is more than its outflow, its time to cheer and of
course make some savings for the future.
• Next good thing you can do to manage your money is to make
investments. Investments can be of different types. You can invest in a
property or land, in banks, in stocks etc. The investments you make not
only keep your money secure but also give you good returns. Like money
that is kept in a fixed deposit in a bank is supplemented with interest
amount, the cash invested in purchasing shares of an eminent and
successful company, always give a great output etc.
If you are investing in some trust or insurance policies, your wealth
will not just be beneficial for you till the time you live; it will
also be a financial security for your children and grandchildren in
future. So investments generally are rewarding, they do not go futile.
But before making any investment, you must enquire about the pros and
cons of it. For instance, high risk is involved in investing money in
the stock market as the economy is fluctuating unbelievably. Here, you
should acquire complete information that when to purchase the stocks
and for which company that will never let you down etc. The case is not
different with investing in property, but the risk factor is not so
high here. The rates for property are never stagnant. So it is better
to purchase the land when the market is down and sell it when the
prices take a flight. In any case, first acquaint yourself with all the
facts and basics, and then only invest. Remember your purpose is to
make money from money not to lose with whatever you have.
• Are you a credit card bug? If you are and your expenses do not meet
the income, forget the credit cards. The credit card money is charged
with high rate of interest. Though it is the easiest form of money, yet
it can be very troubling later. People keep on withdrawing the money
from the bank’s or company’s credit and the interest simultaneously
keeps on accumulating. Finally, the credit card bill comes as a
nightmare to many. So it is better to avoid using credit card wherever
possible. Try to use it only in case of an urgent situation.
• Keep an accountant if you yourself are not able to keep a track of all your transactions.
Money Management is simple, if you become a little judicious.
