After learning a lot about financial literacy, I have understood that it’s all about managing the money. In this article, I’m going to explain how to manage money like riches:
1. Track your Expenses
Ever wondered where does all your money go? Do you remember how much money you’ve spent last weekend on food? Knowing your expenses is the first thing you should learn. No matter how sharp is your memory, if you’re not maintaining records, you will never learn to track your expenses. I maintain an excel sheet and you can download my template below:
2. Start Small
A penny saved is a penny earned. Well, I don’t support this quote but to start with, this quote can be a great motivator. Try to cut down your unnecessary expenses. There’s always some money that is being wasted unnecessarily. Try to find that out. In my case, I used to order a lot from Swiggy/Zomato just because I was too lazy to cook. Or, I had a postpaid plan with 650 Rupees per month whereas there were a lot of options available in prepaid.
So the point here is, even if we cut down our expenses by 400-500 Rupees per month, it is a good start. No one is asking you to directly save 50% of your salary.
3. Use Money to Earn Money (Most Important)
It is one of the laws of wealth. Even if your money is just sitting in the bank, it generates the interest of 3.5%-7%. Basically your money is capable of earning for you. In fact, your money is always ready to earn more of it. But if you don’t allow your money to earn more, then sorry to say this but you won’t be rich in your life ever.
Invest your money wisely. Focus on higher returns and take calculated risks. Once you have saved some of the emergency funds (Your Monthly Income * 6). Invest all your money. Save to invest. To start with buying safe stocks like Reliance, HDFC, SBI or HUL – you can open up a Demat account with Upstox here.
4. Don’t be a Money Puppet
Don’t kill your wishes for money. Money is meant to give you comfort and fulfill your desire. I love gadgets I have two Amazon Echo devices even though I live in a studio apartment and I love smart homes and buy costly electronic items. But make sure you’re spending Money earned from money.
5. Manage Money Smartly – Don’t Be Stupid
Saving money is crucial but investing is also important. Know your numbers. You must be always aware of the balances. Learn more about financial literacy. Read personal finance books. Bill Gates, Warren Buffet and a lot of Riches keep learning. Never stop learning.
I always try to keep my articles easy-language and my methods are aggressive but sensible ones. Hope this blog added some insights into your life.