Friday, 27 May 2011

How to manage your money and financial matters

You must have noticed that there is a rise and fall everywhere. It is there in financial matters also. There may be good time and bad time. There may be inflation and Deflation. There may be a time you get excessive money and some time there may be lack of money. This is seriously there in the case of people those who don’t have a steady regular income and also in the case of business people. Most people spend more money when they get money and spend less when they don’t get money. But if you are a little bit careful, you can keep consistency in spending money. The following tips will narrate you how you can be consistent in spending money and can be a well disciplined person to handle his money matters.

Stick around your budget. There is a tendency to spend more money in good time. But this will lead you to become insolvent, or with lack of money to satisfy your daily needs. If you have a budget and financial planning, try to stick around the budget. If you budgeted to spend Rs. 1000 for eating out, never spend more than that in any case. Then you can be a disciplined person in spending money.

Spend wisely and keep money for future needs. There is a tendency to spend more money than that what you get. This is possible through credit cards with an anticipation to pay from the next month’s salary. But spend only for necessities and always keep a portion of money for your future needs. IF you spend all your salary in advance, there may be any emergencies or a loss of job you will be in trouble and your credit card debt will be accumulated with interest and penalties.

Pay off your loans as early as possible. If you get any unexpected income or any bonus etc. try to pay off any loan rather you spend for any unwanted luxuries. Try to pay off loans with high interest first and then pay off low interest loans. IF you do so you can pay off your loans a little bit earlier than you expected to pay off and the lesser interest will be an added advantage for you. After paying off the loans you can start investing the EMI money also.

Diversify your investments. Always try to invest in diversified financial instruments or assets. If you invest only in one type of investments, the particular asset may be a failure and you could not easily get out of that loss. So invest in different investment methods such as stocks, Mutual funds, government securities, gold, real estate, fixed deposits etc. If one item became a failure you can gain from other assets.

Keep liquid cash or bank balance as a reserve. There may be any emergencies and you may be forced to spend a lot of money unexpectedly. To overcome such situation you must keep reserve money in your savings bank account. The minimum amount should be equals to satisfy three months total expenses of your family and the maximum may be for 6 months.

Check the performance of your investments. You should make periodical investigations about your investments and should know whether it is profitable or not. Try to close non profitable investments. Checking the performance of your investments will help you to avoid a heavy loss.

Financial planning with foresight. Try to foresee your financial requirements and plan accordingly. Set your financial goals and try to attain those goals in time. Start investing accordingly. If you have a goal you can reach out that goal. If your decisions are stern you can attain those goals at any cost.  If your sources of income is discontinued, you can find other sources to reach the goal. So try to set well defined financial goals and plan accordingly.

Practice a well disciplined investment strategy. Invest regularly and start with small amount and steadily increase the amount. This is the right method of investment. Start as early as possible and remember that today is the best possible day for starting your investments. Do not postpone it for tomorrow. You can start with recurring deposits in banks or post offices and can convert the matured recurring deposits to fixed deposits and so on. Or start to invest in mutual funds in Systematic Investment Plan (SIP). Slowly spread your investments to other financial products and assets.

Do not be frantic with the quick spreading news. You may hear frantic investment news about the falling of your investments. Don’t be frantic and sell all those without a second thought. If your investments faced a crash wait peacefully and watch the movement of your investments. Wait till the price become stable. This situation may happen in stocks, mutual funds, commodities and even in real estates.

Be practical. Now you could not find any quick rich programs in investments and if you hear anything like that it is false information. Learn that the real outcome of an investment and be practical to wait till the slowly growth of your investments. Slowly and steadily with regular investments you can attain all your financial needs. Do not plan an unattainable financial goal which you could not attain in your life time.

If you follow these rules and manage your financial mattes accordingly you can be a better financially disciplined person who can stand his own legs and never bow your head before others.

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4 comments :

  1. [...] Name of the Fund House, Scheme of the Fund (whether it is a Close Ended … Continue reading ? How to manage your money and financial matters You must have noticed that there is a rise and fall everywhere. It is there in financial matters [...]

    ReplyDelete
  2. [...] Name of the Fund House, Scheme of the Fund (whether it is a Close Ended … Continue reading ? How to manage your money and financial matters You must have noticed that there is a rise and fall everywhere. It is there in financial matters [...]

    ReplyDelete
  3. [...] I mean value of money and the purchasing power of money may change. If you can fulfill a financial plan with $1000, you can fulfill the same item may happen with $2000 after 5 years. [...]

    ReplyDelete