Proper management of money is essential, to have a financially comfortable and secure future. Experts say the key to successful money management is starting early. For instance, if you start saving early the amount you save will not matter much, as you give your money time to grow.
Note that, even a small amount invested at a regular interval can get you big returns in the future. Nonetheless, experts say regardless of the age, the core principles of managing finances are the same.
Nityanand Sharma, Co-Founder, and CEO, Simpl, says “Money management is not just important, it is an indispensable skill set to have. And contrary to popular belief, money management isn’t just about making those big purchase and investment decisions; it’s in the little details.”
To start with, one of the most important aspects of being efficient with money is keeping a track of your expenses. Keeping track of or monitoring your money allows you to keep a check on your finances and also identify patterns that are detrimental to your progress. Sharma says, “Something as simple as keeping an account of your monthly expenses will allow you to create and stick to a logical budget which in turn helps build discipline.”
You can start by listing down your income and expenses every month, and then plan your budget. Before managing your debts and savings, first set aside money for paying utility bills. This way by proper planning you can keep track of your monthly expenses.
Another crucial element in managing your money is understanding and adopting the best payment system among the various payment techniques available. For instance, you can choose from cash to EMIs to credit cards and Buy Now Pay Later (BNPL) services. From the many payment options available, choose the one that suits you best.
Opting for the right payment mode will ensure you stay on the right financial path. For instance, if you struggle with keeping track of your expenses, the buy now pays later service could be a good option, or if you are to make some major expense, going the EMI route would be a better idea.
Additionally, note that though it is not bad to opt for a loan or take credit, you should also get rid of all your debt within the scheduled time. Be it your student loan EMI, or your credit card bill, try to pay it within the due date and not roll over the credit. Hence, if you have a lot of debt, assess your situation and pay down unwanted debt rather than piling on more debt.
Sharma says, “While these steps may seem elementary, it is the absence of the same that leads to financial crisis and even disasters.”