Money Matters

Who doesn’t get excited by the sound of ATMs giving out money?

Unfortunately, that sound doesn’t happen as often as we’d like, and that excitement quickly fades away when you end up running out of cash by the end of the month or sooner. Have you ever wondered where all that money went? Have you ever had to make that embarrassing phone call to your parents asking for money just a couple of weeks  after they sent you some before? Have you ever had second thoughts on your way of managing money?

If you have faced any of these problems, chill. You’re not alone. In fact if you ask the people around you right now, they would probably tell you that they too have faced financial crisis at some point in their life.

The problem, however, is very unique, because each individual has his own way of burning a hole in his pocket.

If you do not deal with this problem right at the beginning of your individual (read: single) life, chances are that you will get affected by it later when a lot is at stake…… if you know what i mean. Personal finance management is what everyone knows they should do, but no-one seems to manage to actually do it perfectly.

Quick Fix

So, how can you manage your money efficiently?

You need to do a self analysis .i.e. you have to figure out what the biggest of your expenses are. For example, something to quench that raging thirst? 😉

Once you have analyzed where you spend your money, try locating the areas where spending can be cut off. For example, start feeling less thirsty.

Next make a budget with a sufficient buffer amount. Buffer means you don’t spend it. One mistake most people make is having a buffer and planning their expenses to include the buffer money. No matter how thirsty you are, once you get to the buffer zone, stop.

Finally execute the plan for a couple of months and make the necessary changes permanent.

Long Term 

This was something along the lines of a quick-fix, but real life is ahead and it’s full of surprises so we need to broaden our management techniques.

We need to further segregate our money into short term expense and long term investments.

Yes, we need to start investing our money. The sooner we become a part of the world of investments, the more profitable we are going to be in the longer run. Start by first getting to know the safer modes of investments like liquid funds, fixed deposits (first with banks then with companies), public provident funds, bonds and mutual funds.

Meanwhile, also try to find out how the stock market works and use simulators for practice.

When you are confident about the world of investment, start investing and remember that sky is your limit.

Hopefully, by now, you have a fair idea of what goes into managing money. These are only baby steps into a big bad world that’s out to get you, or at least your money. The sharper you are with it, the better off you’ll be. So stay vigilant and keep track, because money really matters!

-Gnana Maanoj

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