5 Money Management Lessons For Every Indian3 min readReading Time: 2 minutes
Life is secure when your finances are in place. This holds true whether you are in your 20s or 60s because nobody wants to get caught in an emergency without a well-thought-out plan. Money management doesn’t require you to be a specialist. You can attain much-needed financial empowerment with monetary discipline and mindfulness.
Here are a few money management tips that will help you to build a strong financial foundation.
1. Create A Budget And Stick To It
Living within your means is a vital lesson that one needs to learn. To begin with, you can create a budget and plan your expenses around it. Try to classify your expenses as urgent and important, not urgent but important and so on. Keep a track of your expenses regularly to address the necessities first and provide for the rest.
2. Save For Emergencies
Once you are have created a budget for yourself, you also need to make provisions for an emergency fund. Having an emergency fund in place helps you to take care of the unexpected expenses confidently. To build an emergency fund, apportion a certain amount every month. You may invest it in a liquid fund that gives you instant access to cash during emergencies.
3. Invest Based on Your Goals
Investing is an important habit that helps you to accumulate wealth for an empowered life. Having goals to back your investments makes it all the more rewarding as you get a purpose and also build discipline. You may have short term goals like creating an emergency fund, or long term goals like financing your higher education. It gives you a direction and keeps you motivated to stay committed to your investments. Along with this, you need to ensure that you assign a realistic time horizon to them.
4. Manage Your Debt Wisely
Smart management of debt is a necessity whether you have a lot of money or not. Borrowing should never be seen as an alternative for situations when you run out of ready cash. It must be viewed as an option only and only when you are in dire need, not want, need. If you have outstanding loans, or credit card bills, then begin with paying these first. Remember to honour your EMIs on time as this will help improve your overall credit score and keep penalties and interest payments at bay.
5. Buy a Health Insurance
Leading a healthy life must top the list of our priorities but sadly many of us don’t work adequately in this regard. What we don’t realise is that an unhealthy lifestyle pushes us into incurring higher expenses in medical bills and treatment costs. While you work towards leading a healthy lifestyle, purchasing health insurance is not only a wise move but an indispensable component of smart money management.
Healthcare costs have risen significantly in the recent past. Thus, covering yourself against health risks will not be cheaper in terms of the premium but will also keep you from digging into your savings or worse, exposing yourself to hefty medical bills with inadequate provision to meet them.
Money management, in theory, may seem daunting, but it couldn’t be further from the truth. You don’t need to be an expert to manage your money. Being aware of your expenses along with providing for your future should keep you on track.
To know more about how you can begin investing in your future download the Paytm Money App and explore the investment packs on offer.