Work backwards and create a budget that takes into account your short, medium, and long term financial goals. If you haven’t any set in place yet, well, there’s no time like the present!
Becoming a pro when dealing with money doesn’t come easy for most of us.
Having said that, “budgeting well, saving adequately, and investing smartly have become a necessity today – in order to build wealth. But it isn’t as difficult as it may seem!” says Dipika Jaikishan, COO & Co-founder of Basis.
Stick to a well-defined budget
Start by taking the time to list down your weekly or monthly expenses — fixed, variable, and aspirational. Jaikishan explains, “From there work backwards and create a budget that takes into account your short, medium, and long term financial goals. If you haven’t any set in place yet, well, there’s no time like the present!”
Also, keep in mind to account for spending on a little special something for yourself, every now and then.
Write down all your expenses.
Yes, even the little ones. Jaikishan says, “Noting everything down may seem tedious or unnecessary, but believe us when we say — it gives you clarity. Spent a little extra this month on something you didn’t necessarily need? Well, you’ll make it up by saving a little extra next month. Do you know how you know? Because you have it all written down.”
An emergency fund matters!
Never underestimate the need for an emergency or peace-of-mind fund. Set up a fund or account that you can dip into in the case of emergencies, the loss of a job, death, etc. Jaikishan points out, “Even if your contributions to it are minor, make sure they’re periodic and consistent. Having a backup stash in place helps keep you liquid and sleep a little better at night.”
Pay those bills on time.
Paying your bills on time is a responsible way to manage your money, and it comes with some excellent advantages. Most importantly, experts say it helps you prioritize and focus on essential spending. An on-time solid payment record can also raise your credit score and better your interest rates.
Identify investment avenues that work for you
Identify investment avenues that work for you. Your choices should be dependent on your current financial status, any debt you have against your name, your financial goals, and your risk appetite. Jaikishan adds, “Should you hire a professional, or read and learn over time – choose wisely.”
Plan for your retirement. Now!
Retirement may seem like a long way off, but you can never start planning for it too early. According to Jaikishan, to maintain your choice of lifestyle, you need to set aside money on a regular basis, in order to balance out the sudden dip in your monthly or yearly income, upon retirement.
She adds, “For those of you who have plans of retiring early – better get moving.”
