Personal Finance

5 Ways to Manage Money Better in 20203 min read

January 14, 2020 2 min read
Manage Money

5 Ways to Manage Money Better in 20203 min read

Reading Time: 2 minutes

Managing money forms a major part of your life as an adult. You need to have a monthly plan of how you are going to spend keeping in mind your income, level of savings and investments. This would help you to achieve your goals as planned so that you can live a comfortable life. To have money when you need it the most is the essence of financial planning.

Let’s have a look at 5 effective ways to manage money well in 2020:

Create a Budget:

You need to be aware of all your expenses and you can classify these into fixed expenses (like rent, loan EMIs) and variable expenses (like utility bills, grocery). Use your monthly salary to allocate money from the budget towards these items. You may consider these items as #PriorityZero expenses. Make sure that you do not allocate this amount from your salary towards any other non-priority expenses.

Invest in Mutual Funds:

Investing your savings in mutual funds is a great way to grow wealth for your financial goals. Once you have budgeted money towards essentials, save some part of your salary. You can also start an SIP in mutual funds with one portion of your savings. Schedule the SIP at the beginning of the month to ensure that you don’t spend this money on unimportant things. This would help to keep away the guilt of unplanned expenditure.

Avoid Impulsive Shopping:

You can save money in a number of ways even while continuing to pamper yourself with extravagance and a lavish lifestyle. With the growth of e-commerce in the country now, you will come across sales throughout the year, even at the high-end brand stores. You can plan out to purchase on discount during such occasions instead of shelling out so much for the same stuff.

Additionally, you can also carry a list of items that you need to buy so that you don’t get carried away when at a mall, or when you browse e-commerce apps. Try to engage in need-based expenditure.

Go Green & Keep it Simple:

Green living not only benefits the environment but also helps to save money. You can adopt simple practices like carrying a water bottle and a cotton bag when going out. This can cut down your spending on mineral water and carry bags at stores.

You can cook and host parties at home to save yourself from unhealthy finger food at high-end restaurants. Gradually, you will develop the habit of eating healthy, further lowering your doctor’s bills.

Save Your Credit Card for Emergencies:

Your shopping and traveling experience may seem rewarding with credit cards, but it would be wise to save your credit limit to pay for emergencies like hospital bills or unexpected guests. You may enjoy a lot of liquidity with credit cards by your side but at the same time ensure that you don’t exhaust your credit limit on non-priority expenses & impulsive shopping.

You would be able to manage money more with the help of a bit of planning and some ounces of self-control. It will help you to achieve your goals faster.

Paytm Money app helps you to set specific goals with a money target towards them. You can start an SIP towards these and also track your progress.