Do you feel overwhelmed by the increasing demands on your salary? Financial management is challenging when you have several responsibilities to fulfil. We offer a guide for better money management for the salaried individual:
● Save money the moment you’re paid
Every person knows the value of saving money, but few are able to save with focus and discipline. There’s a simple trick to follow: instead of waiting to save at the end of the month, set your savings aside the moment you get paid. It could be Rs 5,000 per month, which amounts to Rs 60,000 in a year. Save in a bank account that you do not usually operate, and periodically invest large sums from it for greater gains.
● Take a personal loan instead of draining your savings
You might be tempted to use your savings to buy something expensive, like a home theatre system or a foreign vacation. But instead of spending money that takes years to save, why not take a personal loan for salaried individuals for your short-term needs? The personal loan is offered against your income and credit score, and you can easily repay it from your salary every month. Besides, you can build a better score by repaying the loan regularly, or even foreclosing it.
● Make a repayment plan for all your loans
As the size of your family grows, so do your monthly expenses. Soon, you must buy a house rather than shift homes every few years with children in tow. A home loan helps you buy your first home. You need a car for the family — a car loan can get you a vehicle of your choice. You might even borrow a personal loan for a short-term need.
● Invest in insurance
If you are suddenly absent in the future, the loss of your income can hit your loved ones hard. Eliminate future financial shocks by taking a term plan with a hefty pay-out (most plans have a sum assured of Rs 1 crore or more). Also start investing in your child’s future with a good child insurance plan, and by making investments in their name. You could open a separate savings account for them, invest in gold bonds, buy ELSS and set the earnings aside for their higher education, etc.
● Invest in the markets
Dabble in the markets with the help of an experienced advisor. You can spend as little as Rs 500 per month in good SIP schemes, or take a long term equity fund that offers bumper returns on maturity.
Conclusion
Managing your expenses within your salary can be a tightrope walk — but clever planning at the right time can help you sail through and amass future wealth.
