All posts tagged: splurge

Common Money Management Mistakes Fresher’s Commit in their Early Years

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While you are young, you do not really realize the role that money plays in your life in latter stages. So it becomes imperative to realize that there is a balance in money management that we need to attain.

Just entering into the shoes of an employee makes you see the world with a different view altogether. You have a different take on everything. Stepping out of your comfort zone to a ground of exposure makes you cringe with anxiety at times. Because financial responsibility now is yours to take care of.

We want to list down some basic yet important thumb rules that you should follow at early stages to plan better in finances.

  • 1. Keep a check on your purchases: Money is yours. Direct your expenses and control your money. Do it either the offline or online way, but do it. Try your hands on excel sheet, or manage money with one of the money management apps. It makes life easier with lesser roadblocks. Be systematic, and assess the costs that spread across areas of essentials and non-essentials.
  • 2. Always build some emergency fund. It is imperative for us to have some financial aid, in case of an emergency. Try keeping aside a small portion of your savings for this section. Parting away from money is painful, but this money will be your friend in need during the unavoidable crisis
  • 3. Steer clear of debts: Debts do become our part of lives, at some point or the other. But it is necessary to keep a check on the debt pile. It should not accumulate enough to push us in the debt trap. Be wary of what you borrow. Borrow but repay on time. Don’t be habitual in using the credit card every now and then, if you cannot repay on time. This just builds pressure that is uncalled for.
  • 4. Shake hands with Tax management: Even though you are in your primitive years of earning, tax management is an art to master. The sooner you come to terms with it, the better it is for your later life. Evaluating the money that gets pumped in by tax machines, helps us to list better our expenses for duties , necessities and obligations.
  • 5. Resort to common sense and practicality: Be pragmatic about your needs and wants. For example wait for a while till the gadget in your wish list becomes cheaper instead of buying it right away. Opt for facilities that are free, instead of going out of the way to splurge on non-necessities. This does not imply that you need to compromise on your basic needs, but this just means that avoid extravagant expenditure. Especially the one that is easy to evade.
You have just embarked upon your professional journey, and we would want to wish you luck for all your endeavours. We want you to enjoy, learn and grow more to become financially able and stable. Happy Earning!
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All posts tagged: splurge

How to Handle Finances Right After Marriage?

marriage-finance-changes

Youngsters before marriage find themselves perplexed when finances are being spoken of.

There is an absence of savings or a very much required emergency fund. Since their money management habits are haywire,it becomes essential that they get improved and systematic after marriage.

If the financial loopholes are not taken care of , then these become one of the biggest obstacles for both the individuals.

We would want to talk about some simple yet essential measures that can help you out during this phase of your life, Hence,we have jotted down some significant points of financial management after marriage. Have a look. Some ways to handle finances after marriage:-

  • 1. Plan for the uncertainties: – Even if you are stable in your careers and have a good salary, you both need to have a structured financial element in mind. Emergency won’t knock the door and come. Couples today are not really equipped to combat these emergencies, and are under constant stress. Unexpected illnesses, accidents, layoffs can cause a great deal of pain, and hence it is advisable to save a share of your salary over a period of time. This certainty helps to deal with the uncertainty in a much better way.
  • 2. Smart Spending and Smarter Investing : When you are married, you both need to be accountable for what you spend and invest. Spending is inevitable, as it is the simplest answer to both necessities and wants. You cannot blame the other person for the spending. The bottomline is both of you spend, but on different things, and hence there is a need to set a budget.It is required that both of you get on the same page, and focus clearly on the lines of investment. Be it Investing for next year or for retirement , investment planning is the need of the hour. There are many ways of investment for long and short run both. Seeking professional advise also helps.
  • 3. Set achievable financial goals: Having a foresight helps. Deviate from your monotonous life for once, and give considerable thoughts to life after 5 , 10 or 20 years. Anybody can earn money. But judicious usage of money is an art to learn. You just don’t want to walk on a path, there has to be set destinations. You should chart out your career dreams, lifelong goals, financial expectations together and set time to achieve and fulfil them. Summarising the important and less important ones and then prioritising them is the right course of action.
  • 4. Combining or Not combining accounts: So while planning finances, the question of having a joint account or a separate one arises.

    Both the options are working models. Let’s talk about them in detail.

    a)Separate accounts: – When you keep money totally separate, everything(rent, mortgages, necessities etc) has to be split . Also you need to evaluate what you spend, be careful of not spending too extravagantly, as the entire monetary responsibility shifts its weight towards your partner. Also, you need to plan to spend from each account to gain the tax benefits on Home loans, EMI, Investment Proof etc.

    b)Joint Account – In this case, you would put money in a single basket, and use it to pay off and spend. However this requires financial coordination and a mutual agreement on expenditures. You need to get to the common grounds of spending, because if there is a lot of deviation in spending patterns, then there is a lot of room for monetary imbalance and arguments.
  • 5. Checking Financial history – It is important for you to discuss financial history with your spouse and vice versa. Being aware of the financial history, such as the use and number of credit cards, credit scores, way of spending paints a clearer financial picture. So in case one of you has a poor credit score, then having a joint account becomes is not a smooth decision to make. So decision making is highly influenced by financial arrangement of both individuals.

    Managing Debts and Saving: It is good to combine accounts when the debts are cleared off in single or both accounts.

    Saving after the wedding is definitely a good idea, but saving before is essential too. We suggest you to open up a savings account before marriage for setting money goals beforehand and having a vision of future expenses. Both the individuals should invest a portion of their combined income after marriage, and let the account grow. I hope we have helped you in making better decisions. Happy Wedding !
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All posts tagged: splurge

How do I allocate my Salary?

salary

Being at the point of time in our lives, where we finally feel financially able is enthralling. However, it is imperative to not go overboard on spending, and channelize our monetary resources.

We make numerous mistakes during this phase of our lives like we spend more than we earn.
This pushes us in a deep pit of financial fixes.
Hence, a steady income needs a steady management.

Striking the right balance between what we earn and what we save impacts our future positively and reduces the possibility of cash crunches.

But the most common question is “ How do we go about it it? How to distribute our salary for expenses and save?”
So having a financial plan in picture is a always a good sign. Below is one such plan that can help us in resolving the issue.

The Boon of Budgetary Planning: –

Having a well-schemed budget is as necessary as breathing and it is just the half battle won. Our pockets empty faster than they fill. They forever bear the “Low on cash” Tag

This efficacy of the plan lies in how we divide our expenditure into duties, obligations and splurges. At the end of the day, we earn to spend but we need to spend right.

So we should draw a plan that broadly classifies our division of expenditure into the following: –

Savings:-
Having a foresight for the future helps us guard our money better. The maestros of investment suggest that “Do not save what is left after spending, but spend what is left after saving”

We should dedicate 20 percent of our salary towards investments for future. Also savings should not be just confined to the walls of emergencies, savings can also be for planning our future better. This holds true, especially when the tax rates surge higher with passing time.We do not want to be like the sitting ducks to the taxing alligators. Regular and planned investment, eases the financial burden over a period of time, Gradually with this scheme of action, you won’t even realize the substantial chunk of funds that are left in your kitty.

Routine lifestyle expenses: –

Allot a good 50 percent towards your household finances. These finances are unavoidable and necessary. From rent to electricity bill, timely payment is essential. Plan your lifestyle in a way such that the expenses towards it do not surpass the allotted percentage.

For example: – Going overboard with the usage of electrical appliances or unnecessary wastage of power can render mammoth sized bills. So it is advisable to monitor and regulate the use.

Food and Clothing

Both of these fall in the “can’t live without category”, so we cannot really compromise. However what is in our hands is wise spending.

If we invest cautiously , we can have a good share of funds to choose from our favourite brand of garments.

Debt/Loans

Repayment should be one of your top priorities. Dilly-dallying the repayment, will only increase the burden on your shoulders and make them droop to the monetary pressure. Also, it spoils the credit score which in turn reduces your chance of accessing loan in the future.

The debts and dues need to be dutifully cleared. So a 25 percent should be allotted for this.

Recreational Purposes:-

Now you will still be left with some money, you can pamper yourself with some shopping sprees , binge eating and partying.

Because who wants a life filled with blues and greys . We believe “Jab jeb ho full toh Life Colourful”
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