“You can make a living or design a life” To be financially secure you do not have to be an expert in finance or have a big portfolio. All you need is to understand the basics of financial planning. Some people suffer financial struggles for not bringing sufficient money, while there are others who do not spend wisely. Saving and spending money are two sides of the same coin. Saving is necessary and so is spending it wisely. Today we will help you with a few tips to understand how you should plan your money to attain your financial objective in the long run.
➔ Track your money–
The first step to figure out how to spend your money wisely is to understand where the money is going! Analyze both your income and investment for it. Make a budget along with a financial goal. A goal will help you to give direction and you can start looking for options where the money can be spent. Tracking money will help you take steps to efficiently manage the money. Discuss with your family and take their help in planning. A well-planned expenditure not only saves money but also helps in the best utilization of resources.
➔ Put your money on the credit card only if you can pay each month–
Credit card is now an indispensable part of all our lives. The convenience of the payback option makes it a bonanza for the user. It does not serve as hindrances on finances as many cards nowadays offer cashback. The deal and offers of credit cards cannot be matched by other financial products in the market. If you are able to pay your credit card balance at the end of the month, you won’t attract interest and it will be similar to paying cash. You should make sure that the interest does not spiral out of control. If you pay and monitor the use of credit cards, it will not be a burden and you can reap benefits from it.
➔ Social pressure-
As per a recent study, most of the expense of an average person is to maintain social strata in society. Since childhood, we are trained to maintain an image. From all the expensive cars to furniture in the house, From clothes to expensive phones that we possess are just to maintain social position. Ask yourself, do we really need them? I am sure for most of the things the answer will be no. You should only buy things that you really want to, things that bring joy and happiness to your life. “We live in an age where unnecessary things are our only necessities”, Oscar Wilde. So, Impress yourself and not others to be happy.
➔ Habits–
“Your habits will determine your future” as they form a major part of a person’s expenditure. Once you track the money you will understand which habits of yours drain your money. You can be habitual of anything such as drinking, eating junk food, casino, buying apparels, or any other. Tracking will help you to evaluate unnecessary expenses. Track, Identify, examine and implement, this will help you attain your immediate goals. If you want to spend wisely understand what needs to be included and excluded from your budget.
➔ Drawbacks of unnecessary purchases–
Most of the purchases that we make are our impulsive decisions. Before buying you should always ask a few questions.
● Is it necessary to buy now?
● Is it worth the cost?
● Will it help me in the long run?
● Is it leading to a debt trap?
● What is the value that this purchase will add to my life?
Such decisions are okay when the purchases are small, but for bigger purchases, you should evaluate all the answers to the above questions. This will help you understand if the thing is worth purchasing. Remember assets depreciate over a period of time. You should avoid buying things which have no use in the present.
➔ Education & training–
The best use of money is to invest in yourself. To climb the ladder of success you need to continuously learn. You will be able to adapt to the changing trend only if you are aware of what is happening around the world. Education will play a vital role if you want a new job or promotion in your career. Isn’t this very obvious, but employees who are satisfied with their jobs tend to be happier and completely neglect to upgrade themselves. Growth and learning are directly related to success. As said ” The key to success is dedication to lifelong learning”, Stephen. Each step of the ladder will challenge you differently. The only way to prepare for it is to learn and learn.
➔ Spend on Healthy food–
Health is wealth, we all know this! But do we implement it? Spending on healthy food will cost additional. Healthy food will not only keep you fit but is also good for mental peace. We generally don’t appreciate it unless we have lost it! Learn from others and look after yourself. One of the keys to spending wisely is to build assets and health is one. Health is a personal asset that we often neglect. Earning & saving while you are young and then spending the same money in regaining your health will add no value to your life. Think smart and act smart.
To attain your financial goal in the long run, you need not only have to save but also spend wisely. This will help you build assets and optimum use of the same. In economic terms the more money in circulation the more activity in the country. Success comes to those who understand that saving only can help in retirement or emergency but to keep yourself happy, fit, and satisfy your needs, you have to spend too!
“Wise spending is a part of wise investing and it’s never too late to start”
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