10 Effective Ways to Manage Your Money

We all work hard day & night just to earn our livelihood, however, wealth creation is not about working hard but to make your money work harder than yourself.

Make money your employee and extract as much profit as you have invested in it.

Thinking about how to achieve this ?

Being an investor from a long time and a personal financial advisor to many, I would say easiest way to achieve this is to work smart, however, its easier said than done. That’s why below I have listed the steps that are simple and will give you a highly strong base and prepare you for a wealthy journey.

  1. Understand your needs

Clarity is power!

One can only define a path when they know the destination.

Few want to buy a house in 5 years, few want to go for their dream holiday or want to save for their child’s education; one can have numerous requirements.

It’s essential to know your monetary goals before you develop the habit of saving and investing. Be clear with your needs and the time you have to achieve them.

Only then you will be able to develop a successful strategy.

  1. Be Realistic

Now you are all set with a bullet proof strategy, however, be realistic with your approach. No one can save a million in a year even with a six-figure salary.

Unrealistic saving goals will only demoralise you and at the end you will give up.

Best approach would be to prioritise your monetary goals, understand your expenses and then decide a realistic strategy which you will be able to execute effectively.

  1. Make a Ledger

A ledger is a book where we make a note of all our transactions i.e. debits and credits.

The essence of saving is to know your money. Keeping a track of your expenditure and earnings will help you understand your daily spending habits and enable you to make wise decisions.

Develop a habit of noting down every spend or income for the day, even if its for a rupee.

Money Manager is an amazing app available on Google Play store that makes your life comfortable and gives you a complete analysis of your expenditure and earnings on the go, making your life way easier. Unfortunately its not available for apple devices, however, in apple you have Numbers app which is also great.

  1. Be disciplined

Everyday counts!

Your strategy will only work when its executed well and that requires an immense level of dedication and discipline. Whether its about maintaining your Ledger or saving a specific amount, remember to do it every day. Even a day’s lag, will ruin your habit and ledger as a whole and by the time you will realise that, it will be too late.

The mantra to reach your goals fast is to be disciplined and keep modifying your strategy time and again for higher gains.

  1. Analyse and Prioritise your Expenses

Focus on what’s needed and then think about what you want!

Many a times, we tend to spend more on things that we want than on the things we really need. I have seen my clients invest huge portion of their earnings on those things which they could have invested and got good returns.

Analyse your spending habits from the ledger and then prioritise your expenses.

Outcome will shock you.Trust me!

  1. Invest intelligently

Half knowledge is dangerous!

In todays time, one can invest in various options according to their risk taking ability. However, many would just listen to their friends, family or even television channels and make their investment portfolio blindly due to which many lose their hard earned money.

No one knows your goals and finances better than you and investment requires a lot of knowledge and in-depth analysis.

Therefore, whether you invest in Mutual Funds or traditional Fixed Deposits always consult an experienced fund manager.

  1. Refrain from credit cards and loans

Who doesn’t like to have a flexible way of paying debt or getting money at once and then paying it part by part!

But before you opt this overly tempting feature ask yourself, Do I really NEED this? NEED again is a most important factor here because you are willing to pay an interest to the financial institution and as well as taking a liability on yourself.

Credit Cards and Loans are luring but can prove to be a huge liability and a headache.

  1. Be Emotionally Intelligent

Your decisions should be guided by facts and not by emotions, Especially for those who tend to invest in volatile sectors. Its very difficult to not to panic when you see your hard earned money fluctuate, but remember every dip or gain has a reason behind it.

Learn to think objectively, gain as much knowledge you can before you invest anywhere, consult an experienced fund manager always and start small.

  1. Start today

Last but never the least!

They say tomorrow never comes and nothing can be more true. We all wait for that Perfect time, that next paycheque when we have planned to start saving and investing.

Let me tell you a secret, the perfect time is today!

The best way to save is to start right now. Whether you save a penny or a six-figure amount, it doesn’t matter.

  1. Conclusion

Concept of creating wealth is not rocket science. All it requires is discipline and constant learning. Never let money be your master, control it and manage it efficiently.

Don’t get carried away by looking at high returns of a sector and invest blindly. Always research before putting your money on the line because anything that gives high returns in short time will be a high risk sector.

Now get up and get started!

Writter by Puneet

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