It’s never too late to learn about money management. It’s one thing to earn a good amount of money, and another to save and invest it wisely. On that note, the following are some of the best tips on personal finance that can help you save more and get richer quicker:
- Develop a Habit of Saving Early
Many people think that they should reach a certain point in their career before they start saving money. However, that’snot a good approach. There is no bad time to start caring about where your money is being spent and how you can save more. In fact, you can start as soon as you are in college even if the income is small.Besides, you can easily find dozens of money saving tips for students online.
- Create Financial Goals
Goals are important in every domain- education, career, and even personality development. If you want to increase your income and become successful in life, then you should establish some financial goals too.
Ideal goals are always SMART:
- Specific: How much income do you want to grow, or how much money you want to save in a certain period?
- Measurable: Can you measure the goals in tangible numbers- time, money, certain number of skills that are learned?
- Attainable: Are your goals realistic and achievable with the skills and circumstances that surround you?
- Relevant: Are the goals relevant to you? Do you really care for them to work towards them?
- Timely: Do the goals have fixed timelines? It’s better if there are both short-term and long-term goals in your strategy.
There are many reasons why goal setting can improve your focus and help you achieve your dreams faster. So, make sure that you create yours and stick to them no matter how adverse the circumstances are.
- Avoid Debt
We live in a period where different kinds of startups are emerging in the fintech space to offer flexible and affordable financial solutions. For instance, there is no dearth of platforms that can help smooth financing of your short-term loans. However, having easy solutions doesn’t mean that you should avail them without thinking twice.
It’s not like debt is a bad thing. Of course, if you are financially strong, then you shouldn’t have debt at all. However, if you do need to take a loan or some other form of debt, then you should try to lean towards the “good debt”.
Good debt is debt that increases your value or of itself over time. For instance, a home loan is a good debt as real estate usually increase in value over time. The same goes for education loans as they increase your qualification and help in getting better jobs.
There are many examples of bad debt too- personal loans for marriages, credit card debt, etc.
- Look for Secondary Incomes
Unless you are making a ridiculous amount of money at your current full-time job, you should always look for ways to make some extra money on the side. In fact, opportunities for the same are more common than you think.
One of the most practical ways to earn a secondary income is to become a freelancer. You can sell services like copywriting, logo designing, app development, etc. to small and big businesses around the world via platforms like freelancer.com. You can also earn money with mobile apps, especially mobile casino apps. For instance, the mega moolah isis slot is a progressive video slot that allows you to win real money based on your luck. You can play the game at leisure or when you just need to kill time at a bus stop, waiting room of a dentist, etc.
- Use Credit Cards Wisely
Credit cards have their uses. They can help you pay for expensive items like furniture, home appliances, etc. with a debt which you can easily repay over a period of a few months (EMIs), increase credit score, deal with financial emergencies, etc. However, irresponsible usage can also increase your debt and bring your credit score down which can create problems for you if you need a loan from a bank.
Strictly from credit scoring perspective, your credit utilization ratio should be below 30%. If you don’t know what your ratio is, then you can consider the following example:
Let’s say that you have two credit cards which have a limit of Rs. 50,000 each, and your average monthly spending with them is Rs. 40,000. So, the credit utilization ratio will be:
40,000/1,00,000 = 40%
As mentioned earlier, the ratio should not be above 30% which isn’t the case here. So, you should take measures to bring it down by either controlling your expenses or getting another credit card.
Apart from credit utilization, you should also check your credit card balance every month. If you have a habit of making minimum payments which really only carry your debt over to the next month, then you should ditch the same and pay all your bills in full amounts.
Money management isn’t a herculean task. It’s a shame that most people would rather just go with the flow and handle expenses on the fly without any kind of plan or strategy. If you want to save money and increase your income faster, then don’t forget to apply the information above. You will benefit for sure.