Follow Money Management Mantras to Lead Wealthy Life

Have you ever heard from your parents or grandparent that “Money does not grow on trees, spend it wisely”. It is for sure everybody has heard the statement once in his/her lifetime..No one in this world is born with the money management tips ingrained in his/her mind. But, it can be learnt like other activities such as writing, reading, etc. Believe it or not, sooner or later, everyone can learnt it if s/he desires for.

Just like time, money is a resource which is important to manage. Owing to the fact, managing money is considered as an important activity which helps an individual to meet his financial requirements. In simple terms, money management can be defined as the process of having adequate knowledge about ones spendings and savings. The money management tips enable individuals to live comfortably, meeting their short term and long term financial goals, and increasing their wealth with the passage of time. These tips also lay emphasis on taking care of unforeseen and unexpected expenses and losses. So, use these tips to stay ahead of your financial goals and lead wealthy life which you often dreamt of.

Money Management Tips

Setting goals- Set your long term and short term goals. Besides this, decide how you are going to arrange money for achieving these goals without taking credit. The short term goals can be saving Rs. X amount of money on monthly basis, purchasing a laptop within the time span of 6 months, etc. The long term goals can be accumulating that much amount of money for child's education or child's marriage, etc. Setting financial goals acts as driving factor for making savings and spending money wisely.

Track your Income- It is necessary to keep a note of all your incomes which are receiving from various sources. Sum up and get an exact figure of your total income for a particular income. For instance, a person is providing tuitions and earning Rs. 5000 money from it on monthly basis. Besides this, he is providing dance teaching classes which enables him to earn Rs. 10000 per month. So, in that case his monthly income would be Rs. 15000 per month.

Note down Expenses- Pen down all your expenses of a month. This helps in giving crystal clear idea of total expenditure you made in a month.

Decide on how to utilize your savings- Once you have obtained an exact figure of total income and expenses, calculating total savings won't be an uphill task. Once the amount of savings is obtain, the crucial step is how to utilize your savings, how to invest the money in various financial instruments, etc.

Where to invest money

As such, there is no thumb rule which needs to be followed while making financial investment. However, it would be a wise decision to diversify your portfolio in various instruments. Invest 10-20% of your savings in instruments like SIP or RD. In these instruments, the investment can be made either monthly or quarterly. Begin with that amount which you can afford and keep on increasing amount with the increasing income. The next important step is to establish an emergency fund for meeting unexpected financial losses. These funds act as helping hand in the times of financial turmoil. If you have good knowledge about share market, you can make investment in shares or bonds. Although, it is a risky market, involves huge return in a long run if money is invested in right shares. Hence, it is advised while making investment in stock market, take the help of financial advisors.

Therefore, at last, it can be said that money management is an art of setting realistic financial goals, making expenses and saving accordingly. The one who is able to learn it can increase its wealth and enjoy luxurious life and the one who does not, will face the financial problems. So, decide yourself which side you would like to stand?