How do you improve your money management skills?
To improve your skills in money management, you must know that saving money will help you in the long period of your life, be it vacation plans, kid’s wedding, foreign education, health severities, or any other crucial occasion in your life demand for money will be stagnant. We understand that saving and managing money can be tricky, and not all of us understand how to manage money and create surplus funds for our better future. To improve your skills in money management, we have come up with eight such money management tips that will make your financial journey peaceful and stress-free for life.
1. Take stock of your current situation
To grow financially, the initial step is, to be honest with yourself about your current financial standing. We suggest you write a note of your earnings and your expenditure to understand the amount of money required for spending and what percentage of funds can be saved.
2. Start early
Starting early with money management will give you an ample amount of time to save money and create a habit of saving money. Money management skills should be learned early in life and starting early with the same will make you habitual of saving money in the long run.
3. Plan for your money
Planning your finances is one of the most crucial steps of the money management process. If you are not working according to a plan, it is natural to fall short of money that could have been saved. We are all guilty of falling prey to unnecessary expenses, which later leave us disappointed with our savings. So, start by planning a budget today before it is too late to save for your dream international vacation or a luxury car.
4. Set a budget
After you are set with a plan, now is the turn to create a proper budget for your expenses, necessities, and savings. All it takes is an hour and a half to list down your expenses and how to manage money that remains after the necessary expenditure. We understand you feel budgeting is a tedious process, but now what seems boring will surely turn out to be a boon in your later years.
5. Set up the right savings account
How about we tell you that the money you save will be more than the actual money you put in? Yes! You read that right, by opening a savings bank account in a trusted bank, you can get up to 4.5% of interest on your savings amount. Finding the correct bank account for you will act as a stepping-stone in your financial well-being and will help you manage money in the best possible way.
6. Set up your financial goals
This one is again one of the best money management tips that you need to know. Making specific goals for your funds will help you save a handsome amount of money for your prospective future. As finding a goal in your life is important for a bright future, similarly, setting up a financial goal for yourself will help you stay focused, motivated, and enthusiastic towards saving a certain amount.
7. Check-in with your finances every day
Health is wealth, and vice versa. In the way, you take care of your body and health each day, in the similar way you should keep a check on your finances on a daily basis. Keeping a daily check on your expenses and savings is a must to make progress financially and know how to manage your money fruitfully.\
8. Make sure you are paying the best prices
Looking for discounts and sales for purchasing the things you need is another excellent example of money management. If you are looking for how to manage money and save more, this tip will help in disguise. Make a habit of shopping at the time of festival discounts or end-of-season sales to save that extra penny each time you get home a shopping bag.
9. Contribute to savings regularly
By depositing your money in a zero balance savings account every month, you can create a better picture for your monetary savings in the long run. Contributing some amount to save each year in the zero-balance savings account will help you start your savings journey with no minimum balance to the amount you wish to save in the said period of time.
10. Why Is money management important?
The importance of money management is learned mainly when we need surplus funds, but we are stuck in between due to poor financial management. For such situations to crop up ever in our lives, we must start saving money, making a budget, and cutting on extra expenses from our early years. By managing money, you will better understand your income and expenses, helping you create a financially secure future and hold a sustainable financial status.
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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