HOW DO I BECOME MONEY SAVVY?
Q AI have limited knowledge in organising/saving my money. How do I become financially savvy?
Well, there are a few basic fundamentals which would keep you up to day with your financial knowledge. It could be one of the most important skills you could learn. Everyone deserves to feel secure and in control of their finances. In fact, good financial health can have a positive influence on your mind and body. Therefore, commit to investing regularly.
Start by determining how you want to track your monthly expenses. There are various methods of doing so – maintaining a diary for expenses, creating an excel sheet or simply downloading a mobile application for recording the daily outflow could be ideal. It’s imperative to religiously track and record the expenses. If not, the purpose would fizzle out. Here, one must make a distinction between necessity and longings. As a young person, you could be enticed to the luxury regime and could end up debts if you are not careful.
During the current initial years of work, you should be motivated to plan the strategies in choosing the right financial instruments. It’s critically important to identify the time horizons and the goal line. You should have short and long-term savings approaches, which would help to meet future needs and desires. Currently, there are enough mutual funds and EFT’s (Exchange Traded Funds) available in the market to choose. Additionally having SIP (Systematic Investment Plan) is an ideal way to kick-start the saving and investment goal.
Opt for a life insurance policy, as starting early could save you on higher premiums later. Add critical illness criterion along with your life insurance policy to shield from unforeseen medical conditions later in the life. Minimise credit card usage as this could be a major menace if not managed well. Make full payments by the due date rather than opting for a minimum payment.
Having spot-on knowledge about new investment products and opportunities would keep you engrossed with the financial growth and on track with your savings. If you are tech savvy it is quite easy to enhance such information online and keep the knowledge handy. However, self-discipline is the mantra in the financial regime.