Money performs an important role inside our lives. Using one side it is an instrument for wealth creation for future needs and on the other it acts as a purchase instrument for gratifying present needs. While financial planning allows individuals to meet life goals by wise management of budget and money, it might be observed that understanding how to manage money may be the first step towards the larger goal smartly.
Both these areas call for ascertaining the necessity, time, and efficiency body before getting started. Expense management is focused on getting the right value for every rupee spent and appropriate decisions on the payment mode, that is, cash, check, credit card or equated monthly instalments (EMIs). The two can help us meet our spending needs easily and comfort. Making a grouped family budget which includes regular spends, and one-time, even discretionary, expenses, is ways to be never out of money and save enough for life’s goals. Making a family budget, which includes both regular, and one-time, even discretionary, expenses, is ways to be never out of money.
A person with a budget will have control over his budget. He will maintain a good position to control cash flow and pay short-term dues and make provisions for other goals. The budget of one person can vary greatly from someone else with an identical cash flow drastically. This is because the budget demonstrates our dreams and practices. It is best to customize spending categories predicated on past experience and also have well-defined financial goals, short-term as well as long-term.
Seeking advice from a Certified Financial Planner or a CFP practitioner is the simplest way forward. These include grocery, electricity, gas, phone, laundry, domestic help, eating dinner out and entertainment expenses. As they are regular and inevitable, you can put an easy limit so that they do not go out of control. Furthermore, making mass purchases with relatives and friends may get you good special discounts.
- 25% in safe haven currencies eg FXF
- Higher interest rates
- Pension policies (Section 80CCC) investment
- How do you advise a client looking to buy shares in X product
- Buy a residence as an owner occupant, that will cashflow when you rent it out
- Preferred Stock, Distribution Yield (TTM): 5.42%
Ideally, the right setting for such transactions is cash, debit-credit card and/or credit credit card (limited to the free-credit period). These include things such as buying furniture and consumer durables, valuables like yellow metal or going on a holiday. Since these cost a lot, one must plan intelligently. For instance, while buying furniture, do a price-value analysis to determine the quality and place from where to buy.
Expense management is focused on getting the right value for each rupee spent and appropriate decisions on the payment mode. If the owner offers zero-interest EMIs, compute the cost efficiency by looking at hidden costs like the control fee. The right way to make such buys is money from a prepared budget which may be from the investment corpus. Credit card may be used only as a mode of payment rather than a source of financing. Furthermore, one needs to wisely decide the landed cost in conditions of the annual effective rate of interest.