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4 Money Management Tips

In the holiday season you probably spent a lot of money, didn't you? And now, as the new year starts, you will feel the need to buy new things to stick to the habits you have decided upon or to start afresh. But let's start this year on a better note. Let's plan our money wisely.

Also, I share many other tips on money management in this podcast episode so don't forget to check it out.

💸Tip #1: 50-20-30 Rule

This is by far the best division I have found on the internet for money. There might be a better one but if you are just beginning to manage your money properly, then this is where you can start.

50% of your income = NEEDS

Needs include things like water and not things like cold drinks. You cannot live without water but you can surely survive without a cold drink.

20% of your income = WANTS

You can use this to purchase the Starbucks coffee you want and all the fancy clothes off Mynta

30% of your income = SAVINGS

Make sure you keep the savings more than wants. And these savings are not to be broken to buy that crystal jewellery you saw online and found pretty. Now the question is, how do you make sure that you don't spend your savings amount?

💸Tip #2: Two Bank Accounts

If you can, try to shift your savings amount to the other bank account you rarely use. Make sure you don't connect that bank account to a lot of e-wallets. Create barriers between you and the access to the bank account. The more the barriers, the less likely you are to spend money from that bank account.

💸Tip #3: Bigger Debt/Higher Interest First

If you are someone who has taken debts in form of loans from banks or friends, this tips is for you. List down all the debts you have. List down the amount of the debt and the interest rate on the debt.

Make sure you are not saving little money to pay the smaller debts first. This is because, the more the amount of the debt, the larger the interest you will have to pay. The more you keep delaying it, the more money you end up paying.

This is also applicable if some of your debts have more interest rates than others. Make sure you pay them up first and then come down to the smaller debts.

💸Tip #4: 24 Hours/Days Rule

Before making any purchase, ask yourself do you really need this. Usually, the marketing techniques create this sense of urgency that makes you want to buy things right away. Doesn't put them at fault because they need to sell to earn. But as it is your money, you need to be careful about where you spend it.

So if something is on a sale, delay purchasing by 24 hours. Take 24 hours before buying anything and then come back to it the next day and see if you want it then as well. If it is not on a sale, take 24 days before you make the purchase and ask yourself after that period of time that do you really want this? [You might as well find that the product is going on a sale within those 24 days so it is a win-win]

💸Bonus Tip: Use Money Tracking Apps

Personally, for me, I had to upgrade to tracking my income digitally. Earlier I used to do it in my bullet journal by hand but then I was missing out on some transactions and it became difficult. So, I decided to download an app on my phone because your phone is something you keep in hand so much!

Currently, I am using Income app that is available on Android as well as a web version. You can download a few and see which suits your needs. Happy saving!


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