Being able to manage your money well is not just about trying to make ends meet. You don’t have to have a lot of experience or be a math-wiz to be able to manage your finances well either.
The challenge is to find a way to save a portion of your salary while paying off debts, covering basic living expenses and working towards your financial goals.
So if you’re looking for advice on how to manage your salary, you’re at the right place. I've put my thinking hat on to help you save and create wealth with your hard earned salary.
6 Tips To Manage Your Salary Wisely
Let's check out tried and tested ways to help you become more diligent with your salary and create wealth for the future:
1. Create A Budget
Create a budget based on your monthly net income. Budgeting helps you stay in control of your money and allows you to keep a track of your expenses.
Tracking your monthly spending prevents you from guessing where your money has been spent. You should set realistic budgets for yourself and prioritize paying fixed costs first such as bills or EMIs.
The 50-30-20 rule is also a great guideline you could use to efficiently budget your savings. Spend 50% of your income on your essential bills, 30% on your financial goals and 20% on flexible spending.
2. Set Financial Goals
Instead of vigorously investing your money and potentially jeopardizing your goals, create a framework for what you wish to achieve. You could split your goals into long-term goals such as stocks, equity and mutual funds and short-term goals such as liquid funds and save your income accordingly.
By doing so, you will be able to determine the amount you need to invest for each goal and for how long. Speak to a Cube Wealth Coach to help you identify investment options based on your financial goals.
3. Invest In Options That Work For You
It’s easy to get overwhelmed by all the investment options and schemes available. A good place for a beginner to start would be investing in a options backed by solid financial advice.
Your investment should be in line with what your future financial goals are. It’s important to do your research to find out what fits best with your goals or you could also Speak to a wealth coach to receive professional advice based on your circumstances.
Watch this video to know why you need a wealth advisor:
4. Pay Attention To How Much You Spend
It can be easy to keep spending on depreciating assets, gifts, and wants. but these costs eventually add up to a much larger sum than you would realise. A pro tip from our founder Satyen Kothari: For every ₹1000 you spend on a gift or a depreciating asset, you should save ₹10. This small amount of money will add up in your savings in the long run!
5. Treat Yourself... Wisely
It’s easy to be harsh on yourself but cutting down on things that bring you joy. This could cause you to eventually give into the pressure and unnecessarily splurge. So, when budgeting, it's important to leave room for your wants to stay on track.
Reward yourself with a fancy dinner or a short vacation when you reach one of your financial goals!
6. Pay Off Debts
High interest rates on your debt such as mortgages and credit cards could be a heavy burden on your personal finances. You should consider paying them off as soon as possible once you start to generate a steady revenue stream. Vacation would be much more enjoyable if it’s paid for and you aren’t racking up credit card debt!
Initially, it may seem challenging to manage your finances well. But as you follow these steps, it'll soon become a part of your monthly routine.
Shriram is a Consultant at CubeWealth. He has developed cutting edge IT products for over 2 years before turning to his passion for the written word. His love for philosophy, developing products, and empowering people through quality content is what got him to CubeWealth.
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