10 Quick Money Tips that will transform your life
Money is an important tool in life. We have observed how people used money differently across the generations. Here are 10 quick money tips that have stood out across the ages. They hold the power to transform your life.
- Make your budget for the year. We hear about it so much in the work-places, and yet despite being employed with organizations we don’t make budget(s) for our home and personal expense affairs. Make your budget, every year. Be realistic when you enter the numbers. And use the budget to stay on top of your monthly and annual expenses.
- Separate your expense account from investments and salary account. That’s correct. Have these 3 accounts. Once your salary account is credited in the month, automate the transfer of money to your expense account and investment account respectively. If you are married and your spouse is an earning member as well, you can establish a joint expense account, however still keep your salary and investment account separate from the respective accounts of your spouse.
- Prioritize and track your expenses. Stop buying every item that you want. Remember to differentiate ‘wants’ from ‘needs’. Tracking your actuals against budgeted numbers will give you a better grip on money. While unexpected expenses are not ruled out, your forecast expenses in the future months can be cut down or de-prioritized to make up. Remember to not build fear due to unexpected outcomes. Life is not linear!
- Keep track of your loans. Money in any form has power. And so does borrowed money. We take loans to pursue fulfillment of goals in the present times. Loans can create leverage for us. But not all loans are healthy. One should track all her loans every year, with the focus on closing all of them sooner than the contractual end date. Have a financial goal to foreclose them.
- Ensure your invested money beats inflation. Money as a tool should work for us, preferably harder than we working for it. Our hard-earned money when invested must out-perform the natural fall in value that happens due to plain economics. Track your returns on invested money and take a judicious call if it does not beat inflation.
- Minimize your tax liability by tax-efficiency not evasion. While there are taxes that we have to live with due to tax-laws there are still plethora of tax laws that can help you optimize your expenses and investments. Ensure you bring tax efficiency in your money management activities. Evasion should be avoided by all means. Be a responsible citizen!
- Don’t be scared if your plan fails. Re-try until you succeed. We have heard it many times that if “we fail to plan, we have planned our failure”. Have your plan ready for making money work for you. Make your budget – monthly, annual or any other frequency that suits you. Write down your short and long-term financial goals. If you are unsure where to start, take professional help. Money is the ‘fuel’ of your life. It will take you places if you plan for it. Make your plan now!
- Prioritize your long term goals over short term impulsive purchases. You don’t have to buy every item that your friend has. You are two separate individuals with two separate sets of needs. Analyze your needs and wants. Delay your gratification. Imagine the emotional and financial benefits of realization of goals in future if you find it hard to suppress your impulse to buy something that’s clearly a ‘want’ not a ‘need’. Remember power of ‘compounding’?
- Bring your spouse on-board as a partner. Remember to have him/her on-board. Even if the person is financially not savvy. Having her/him as an observer to your financial action-plan can help prevent silly actions & decisions that one may take due to emotional reasons. Trust me a non-participative yet keen observer with candid inputs is better than having no observer at all. If the person can shoulder more responsibilities, you are lucky! Don’t miss your opportunity!
- Stop listening to ‘un-solicited’ advice. Since money is powerful we succumb to all those discussions that help us save it. We understand its significance in life at a subconscious level. Yet we forget that sometimes people share advice that benefits only the advice-giver. Understand that product seller is different from an advisor. We forget that our situation has not been told in detail before we seek free-advice. One of the best ways to lose money is to take advice from people who are not professional advisors of money. Seek professional help! There are many low-cost yet professional forums that you can visit.Remember to track how efficiently your money is working for you. You still have a chance. Go transform your life now. Cheers!
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