How do we learn about money? From our school, parents, relatives, friends or neighbours. And the result, we eventually end up ingraining the financial habits that are not productive.
The internet is swamped by millions of stories advising on matters related to finance. You want to purchase your first house, fund your overseas education or plan an extravagant destination wedding in a heritage palace in Jaipur, you have a quick fix for all the above needs. Alas, all this falls on a deaf ear.
To start with, making the most out of your monies is not a one-time activity, it is an incessant process. Let’s take an analogy. If you want to remain fit and look young forever, what would you do? Inculcate the healthy habits in your lifestyle and Ctrl+D the malign ones. Similarly, money lessons cannot be paralleled with crash-dieting which is just a few episodes show. Instead, it is about altering your financial lifestyle which is a process lasting till perpetuity.
Our experts from the R&R desk shares few handful tips on how to avoid the ludicrous financial mistakes, so you can come across as a canny person. The tip starts right with being ‘PROACTIVE’ rather than reactive.
Lesson No. 1: Planning is always the first step – Even for climbing Mount Everest
If you take a trip down memory lane, you will realise ‘Planning’ was the first chapter of your management program. The best plans are often the outcome of tranquillity. Hence, we advise you to take some time off and rethink about your financial goals. To create wealth, it is important to list down your goals and timeline for it. Lastly, don’t abstain yourself from seeking advice from your family and friends.
Lesson No. 2: Review your budget
A penny earned is a penny saved. In simple words, it is not what you make, but how much you save that matters. Monitor your budget for a few days to understand your spending patterns. Curtail your trivial expenses, have a steady flow of income and do not compare your budget with others.
Lesson No. 3: Outstanding payments on plastic money doesn’t impress anyone
It is difficult to resist the glamour of snazzy outfits from your favorite brand or the gratification derived by swanking the latest gizmo. Credit cards are precariously the simplest way to pay tomorrow to own the fancy stuff today. As captivating it may sound, it is important to factor in the unforeseen situations and the mounting interest rates. Be thrifty and sagacious before you let your credit card swipe!
Lesson No. 4: An early bird catches the worm
People normally start saving when they reach their late 20’s. In fact, investing in few financial instruments can be started much earlier. It starts right from saving your pocket money during your college days and investing it in bank savings account. The good news is that you can start with a bare minimum amount of INR 500. This will help you to create wealth over a period of time.
Lesson No. 5: Catechize the right questions to yourself
Ask yourself the following questions:
- Are you prioritizing your expenses?
- Are you living within your means?
- Are you saving enough for your retirement?
- Are you discussing money matters with your spouse?
If the answer is YES to most of them, you are on the track. But if it’s a NO for all, then it’s a red alert for you!
Lesson No. 6: Time is imperative
A wise person gave me this priceless advice, “Time is non-refundable, so use it with intention.” Rather than squandering your time on futile activities, invest in constructive ones to create wealth in the future. If you have enough time at your disposal, you can also explore the part-time work opportunities for that extra buck.
Lesson No. 7: Invest in yourself
As the adage goes, “An empty mind is a devil’s mind,” it is vital to upgrade your skills rather than being indolent. You can join the hobby class or enrol for a certification program which will give you an edge in the future.
Lesson No. 8: Venture with a small step
Even though the first step may seem like a drop in the ocean, remember ‘Roman was not built in a day.’ Similarly, the process of wealth creation is not a one day task. Small steps lead you towards your end goal, albeit you need to follow a disciplined routine. It is easy to keep a tab on your pocket for a few weeks, however, you need a conscious effort to make it an integral part of your financial lifestyle.
Lesson No. 9: Emergency contingency plan can give you a sound sleep
Hope for the best and prepare for the worst. Are you safeguarded against unfortunate situations such as losing your job or meeting with an accident? Your emergency contingency plan should be able to suffice your 5-6 months expenses in case you have an encounter with unpleasant situations.
The bottom line
To create wealth, the most fundamental money tip which any financial guru will give you is: Invest at an early stage in your life. With this, many will also advise you to focus on investments that can generate returns over the inflation rate.
Research and Ranking empowers you to do both. Our dedicated research professionals identify the right stocks and create a personalized portfolio which you can hold for a long term. These stocks generate the returns of 4-5 times in the interval of 5 years. To mitigate the risks associated with the stock market, we also monitor the recommended stocks on a timely basis.