By now every friend of mine knows that I am working in a Finance domain. They have started teasing me now-a-days. Recently when we met for New Years Eve, one of my friends asked me what’s your “financial resolution” for this year. How much are you saving and planning? Let’s keep these teasers away. But I am sure most of us are worried about money at start of New Year (actually we are always worried about money.) If you are reading this then you are worried. I have compiled plain and simple tips to keep you financially healthy and can be followed easily.
1. Become your own CFO
You can not take control of things which you do not know. To take control of your money you need to first check where you are spending it. Track down what and where you are spending your money. Nobody cares about your finances more than you.
2. Go on a diet
Please do not close the window. I am not suggesting you to stop eating. I am asking you to track down that one expense (unimportant expense) which is not allowing you to achieve your goals. It’s a fable in finance, if you can avoid certain expenses for 30 days you can avoid them easily for near future.
Example: Simple expense to choose is buying online clothes. If you have an urge or habit of buying clothes (let’s say T-shirts / shirts costing you 1000s / -) every month. Then you can calculate expenses for whole year. Ie Rs.12000 / – I am sure you will survive without this expense. Try to invest the amount for yourself.
3. Be selfish
Think about yourself first and then help others. This mostly happens with ladies (be it mommies or sisters), they put their family first and then are unable to help themselves. Ladies you should understand once, you invest for yourself and then you get flexibility of helping others.
4. Automate your money
I am not asking you to use your debit / credit cards for shopping. I am suggesting instead of paying manually for your investment, just automate the investment. Your money is straight away taken from your paycheck for your retirement investment account or mutual funds investment account. This makes you worry less, save time & money and stop you from expenses money. Automation helps you save more, keep priorities intact taking emotions out of it.
5. Add another income stream
Do not rely on single source of income. There are numerous sources wherein you can apply for second income. Make 2015 more lucrative for yourself by choosing second income source.
6. Get a library card
Do not just let things go off. If you do not understand things related to finance / investments, either get them cleared from your financial advisor or look for answers in books. There are loads of books on finance and investment written by experts.
7. Make your investments boring
I am not asking to delay your investment. I am asking to invest and forget about it. When people invest money they are kind of excited about returns on that time! They start monitoring investments every day and buy and sell according to market. This might lead you now. To make money, you need to take out your excitement and stress. This reminded me about the statement made by Paul Samuelson – “Investing should be more like watching paint dry or watching grass grows. If you want excitement, take $ 800 and go to Las Vegas.”
Track your progress
Everything matters in finance is how much you save. Keep track have you started saving better than before? Every month track your networth (I use moneyfrog.in to track it). This gives you idea about Investment, Savings, Expenses or Taxes. This can make great impact on your finance / financial planning
9. Cut out 10%
Try to reduce your expenses by 10%. List down your expenses and see which can be stopped or reduced. Invest these few thousands or hundreds in yourself or in your future via paying off your debts, investing for your planned business, etc. Try to maximize do this for better savings. This idea works each time.
10. Cut your 2015 taxes
Word Tax makes us run. Before it gets deducted from your paycheck get done some tax saving investments. You can start saving your taxes for financial year 2015-16 as market is good for investments.
11. Reduce your goals
When most people do not create goals (You can use moneyfrog.in for your life goal tracking), but it’s an extreme when people create too many goals. Do not just dump your goals. Successful people keep their goals simple and create single challenge in front of them.
12. Spend smartly at the holidays
This year with many long weekends can tempt you to go on mini vacations. While planning your vacation do not forget to plan the expenses too. Try to compare different traveling and staying packages at different places which are easily available online can help you plan your holidays better and will save more.