Best 8 Money Management Steps- Simple & Best Financial Planning

Money is something on which we completely rely on to have our base of life!

Having money is just sufficient for a balanced life? Have you managed your money properly? Watch this video 

Money is needed in every aspect of life. Hence it matters a lot! Life becomes much easier when you have to manage your money properly. Your credit score also depends upon how you are spending money. By money management, not only I have secured my finance well but leading a balanced life too. See the steps below how you can manage your money well :

1. Make a Budget sheet & Use that:  

Unless we have a budget sheet with all spending & earning, how can we track our daily, monthly or yearly expenses which provides a bigger picture for making a financial plan? To create an excel sheet(like below) and maintain it monthly, it really enables you to plan well!

 

  2. Segregate your money :  

Ideally, you should segregate your money to 50/30/20 Rule means allot 50% for the households(rent, bills, food etc.), 30% to you discretionary like a trip, entertainment, hobbies expense etc. and 20% should be your saving. This mechanism makes a proper balance on financing.

  3. Restrict your unbudgeted spending :  

The other aspect of the budget is the money left from income minus the expenses, most of the people use this for fun, entertainment etc, that's fine too but with a limit. Spend it unless it's impacting any other budgeted items.

 4.Track your expenses regularly :  

Big or small purchases here & there and you end up doing overspend, so better track your expense using the expense sheet and check the areas of unidentified spends. 

5.Think a lot before taking any Loan/Debt :  

Your credit score is good it doesn't mean you can take a loan! unless it's drastically needed don't take the loan. Any kind of debt or loan is anyway a huge burden apart from your monthly expense, so take it wisely.

6. Pay the best price:  

Before purchasing anything make sure to compare the prices from another channel too and ensure that you are going to pay the best prices of a product or services. Seek for the discounts, coupons, cashback or any other cheaper option.

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7. Limit the use of Credit Card:  

Credit card prone to do more expenses with the flexible payment feature. Restrict your purchase on the credit card for the purchases you can't afford and especially for the things you really don't need.

8. Put Up the extra earnings or unused money in your Saving:  

Depositing the bonus or other income or any left out money into your saving boosts your finance well. In this way, you can make a solid foundation in finance.

Money Management Tips

Now know some more important tips for super money management apart from following the above eight steps.

Tip 1. Manage Your Tax components properly

Most of you pay a good amount of tax every year, but are you aware of all types of tax components and using those properly as per your salary?

there are many good tax saving options available like PPF, VPPF, 80C,80D, Sukanya Samridhi, NPS & other tax-saving investment. Go through all these tax saving options and make sure to use them in the best way to save some more money which you can still save instead paying a huge taxes from your yearly income.

 

Tip 2. Put the extra earned money or left out money into saving or Debt into a good investment channel

If earned extra money or saved from monthly expenses then select a good platform and invest there. The various channel is like Fixed Deposit, Recurring Deposit, NPS, Sukanya Samridhi, Mutual Funds, Stocks etc. Today there are loads of investing app in the market freely available. One of the good ones is Groww which I am also using. It's free and other charges are less compared to others.

Tip 3. Have an emergency fund for 6 months

You never know when times take a U-turn and you arrive at a critical situation. To be better prepared for that always have an emergency fund at least for 6 months. This will ensure you to survive better also in critical or odd situations.

Money Management: Conclusion

These 8 simple steps as well as the above-mentioned tips not only gave me the right direction towards money management but also provided me with a secure future with financial independence:).And am sure these steps will help you too in the same way!

Enjoy achieving the self-dependence on Money:)