Money management — Key tips and tricks to save and spend

Some simple tips to earn, save and spend wisely. Appearing small at first, these can be great ways to inculcate financial discipline in your life.

1. With every Revenue or Income you make, keep aside an amount towards Savings before you spend, and not the other way round.

2. Put aside 10 percent into a Bank account that you don’t use much, or have little access to. This is your Plan B Fund.

3. Create Separate Bank Accounts especially if you are an easy spender. Every time there is an inflow, make transfers to these bank accounts to retain money there. Ideally four which could be:

✓ Spends – Living & other Expenses.

✓ Investments – The amount you systematically put aside with the aim to invest and multiply. Your personalised investment plan.

✓ Growth – The high-risk high-return bucket, where you play the game for higher returns. Essentially an extension of the investment bucket. Ideally you can put aside up to 2% of your income or the amount you can afford to lose, whichever is lower.

✓ Dream – Small upgrades. Big upgrades. That trip you wanted to take, the property you wanted to buy, that expensive course you had to give a miss to in your student days. Living the good life as you define it. All of the savings and financial discipline has little value if you don’t indulge once in a while and life king size!

4. Avoid instant gratification. You have heard this before. Digital payments and e commerce have blurred the lines. Decide a limit for yourself. Set the limit across all your credit and debit cards for online transactions. Avoid debt that doesn’t build an asset or cashflow for you.

5. Do not solve everyone’s Money problems. If you find yourself solving others’ money problems constantly, it will not be long before you land yourself in one. Define your boundaries, and stick by them. Sometimes not bailing out people can be the best help you can give them. And yourself. Remember ‘Give a man fish and you feed him for a day. Teach him how to fish and you feed him for Life!’.

6. Increase your Income Potential. Upskill! Create Parallel sources of Income! Generate atleast one mode of Passive Income! Expanding your earning potential and thus your income is a sure shot way to get closer to your dream life.

7. Get familiar with the Opportunity Cost concept of decision making when it comes to Money decisions. Its how businesses thrive and individuals create wealth. Work on building muscle memory around this. Whenever you say ‘Yes’ to something, you say ‘No’ to something else.

8. Evaluate where you are at. Set a Goal for where you want to be. Chart your financial road map.

9. Build ease around Money Conversations. The smoother this gets, the better your decisions will become.

10. Build a Great relationship with Money!