You’d like to live well, be comfortably off and have enough to enjoy a few luxuries and the occasional holiday or splurge, right? You’d also prefer to have it all while living within your means. Is that doable? Definitely! All it takes is a few tweaks. Here are 5 money management tips to get you started!
Tip 1: Get a Clear Picture of Your Income and Expenditure
This is easy. Sit down and write down your monthly income. Next make a list of all your fixed expenses. Fixed expenses are those you know you’ve got to pay every month. This is your mortgage or rent, the car installment, the utility bills. Remember to add in payments that don’t come every month, like car insurance. Subtract your outgoings from your incomings. What’s left over is the money you can control.
Tip 2: Track Your Expenses Meticulously
Get yourself online and find an online budgeting service to help you keep track of every rupee you spend. One place to start is ‘How to automatically track your spending and goals.’ Most net banking pages also have a basic budgeting setup in place which show you your personal money map.
Tip 3: Everyone has it. Why Can’t I?
Stop looking at what everyone else is buying, or has, or does. Don’t make a purchase until you have the cash for it. This will make you start assessing all the stuff you’ve been buying that loads you down with debt. Do you really need to go on that fancy holiday? Do you really need that expensive car? Instead of splurging on expensive items sock the money away for what you really need to buy.
Tip 4: Pay in Cash, Not on Your Credit Card and Become a Savvy Shopper
It makes sense to make as many purchases as you can in cash rather than on your credit card. This will free up a lot more income than you can imagine and keep you debt-free. While you’re about it, take a look at what you are spending and where. See where you can cut expenses. Do you really need that gym membership when you can go for a run in the park? What about your cable subscription? Is there another cable service that can give you a better deal? What about your hair and nail salon? Check your service providers and see whether they or a competitor can give you a better deal.
Tip 5: Make Sure You Save Every Month
Save a fixed sum of money every month. You should ideally have at least three to six months monthly expenses in your savings account. Don’t touch this money. Keep adding to it. This is your contingency fund for unforeseen emergencies. This way you won’t be strapped for cash if you suddenly lose your job, or if your car breaks down.
Remember, living within your means is easy and doable. In the long run you will have the benefit of financial freedom!