Most of the times, financial crunches happen not due to insufficient income but because of poor money management skills. Unfortunately, there is no institute which teaches us good money management skills. I doubt if we would pay money even if there is one. It is mostly learnt by experience. We are sharing with you ten simple tips which will improve your financial life if implemented properly:
1) Reduce Expenses
This is the first thing that needs to be done for a smooth financial life. There are basically two types of expenses – Discretionary and Mandatory. The second type cannot be avoided, anyways. Focus should be on the first type of expenses which make a drill into your financial pockets. Some may treat movies and dining as regular expenses. It cannot be disregarded by any means. But they can be controlled for sure. The key to good financial life is maintaining the same lifestyle even when incomes rise.
2) Track Expenses
Tracking expenses is an excellent way to tell yourself to reduce monthly expenditure. Knowing where you are spending is a very important step in creating a budget.
3) Create a Budget
Union budget is ready to be revealed. Instead of tracking the budget and waiting for sops, create your own personal financial budget. It is not as complicated as it sounds. You only need a pen and a book. Just keep noting down your expenses at least till 6 months and plan it for the next 6 months. Just stick to it.
4) Emergency Fund
You never know what’s coming. Hence, it’s essential to have an emergency corpus in place to deal with unexpected circumstances. We recommend at least 6 months of expenditure as a corpus fund. It can be kept either in savings account or liquid fund or a combination of both.
5) Use Online Coupons
World has turned online. Websites are competing with each other to provide discounts to customers. Try to make the most of the online coupons provided by these portals. However, you need to constantly check these portals to get the best deals.
6) Avoid Credit Cards
Credit card gives you an option to spend what you have not yet earned. Not everyone has the control over his/her spending so as not to use credit card beyond the limit. Most importantly, if you hold a credit card already, you need to the payments on time every month. You can use schedule option to get this done.
7) Settle High Interest Debts
You may have multiple loans which you need to cater to. However, the ones which really trouble your financial life are the high interest debts such as credit card loans, personal loans, etc. It is advisable not to opt for such loans if you have not taken them till now.