Are You Truly Managing Your Money Wisely?

Money is one of the most integral part of the modern world. Everyone works hard daily in order to earn some income to fulfill the daily responsibilities, family needs and future aims. But the most important thing to know is “whether people are actually managing their money properly”. Many people have a high salary yet face financial pressure due to not being financially stable. On the other hand, some with an average salary are financially peaceful and happy as they know how to manage their spending according to their income.

The true financial stability is neither to earn more but neither to spend less unnecessarily but to have controlled spending, save money every month, and plan about your future.

Where do all your money go every month?

Have you ever checked where most of your money goes every month? The most of the people spend money thoughtlessly without keeping a single record of expenses. Online shopping, food deliveries, subscriptions, entertainment and several other luxury and unnecessary things eat up a major portion of our income and slowly the small expenses turn out to be a large financial problem. People are often surprised after checking how much money they waste on something they do not even need. Tracking expenses is the first step to becoming financially disciplined.

Do you understand the difference between needs and wants?

This is the most critical question in terms of managing money.

Needs:

1. Food
2. Education
3. Medicine
4. Electricity bill
5. Expenses on home
6. Expenses on travel

Wants:

1. Expensive mobile phone
2. Luxury clothing
3. Branded accessories
4. Unnecessary online shopping
5. Costly entertainments

Financially smarter people tend to fulfill their needs and spend the remaining money on wants according to their budget. They will surely struggle if they don’t understand this difference between need and want.

Are you saving money regularly?

Most of the people think that saving is only possible when you have a high salary. However this is absolutely untrue as saving purely depends on your habit and discipline rather than how much money do you have.

Even the smallest savings make the biggest difference and come to use for several financial goals which people usually achieve:

1. Buying a house
2. Start up business
3. Educating children
4. Emergency funds
5. Planning for the retirement

What if something bad happens during an emergency?

There is a famous saying that ‘Life is unpredictable.’ We can face medical emergencies, accidents, business loss and so on. At such critical junctures, people mostly opt for a loan which leads to another major problem or an extreme debt situation. Emergency savings act as a financial pillow and relieve our tension in the hard times. Generally experts suggest to keep the emergency fund equal to 3-6 months of your expenditure for safety of your family.

Is social media affecting your spending habits?

Social media has become one of the major reasons of excessive spending these days. Many a people often tend to buy expensive mobile, luxury clothes, branded accessories and even take luxury holidays just to flaunt their lifestyle on social media platforms. They try to copy the lifestyles and trend set by the social media influencers and celebrities but they often miss on their real financial state. Social media is a way of pretending that you are happy but you might actually be in a dire financial state without saving any amount from your earnings which is sure to create long term problems.

Why is budget planning important?

Budget planning is one of the easiest and effective tool to manage money. People following a budget usually:

1. Have control on their spending.
2. Spend money wisely.
3. Save more and invest better for future.
4. Control impulse buying.
5. Plan their goals according to the plan.

A person with a budget generally thinks and plans his expenses carefully whereas the others often go in over-spending.

Are loans and credit cards become a problem?

Loans can be helpful for important reasons like education or buying a home, but unnecessary borrowing for shopping or entertainment purpose can actually turn out to be the biggest issue in the long run. These days, many a people have easy loan or credit card facility where people shop with credit cards and even apply for installments without prior financial planning which soon turn into a major issue. A financially disciplined person never tries to spend more than what they have to lead a luxurious life but tries to spend only as much they can afford for it and avoid a problem like heavy loan.

Are you investing your money wisely?

Saving money is important, but it is also necessary to invest it at the right place so that money multiplies for you. In today’s world one can easily start with investing money even with a small sum by:-

1. SIP
2. Mutual Funds
3. Gold
4. Fixed Deposit

Benefits of Financial Discipline

The people who have managed to control their finances usually enjoy:-

1. Less Financial Stress
2. Higher Savings
3. Emergency Security
4. More Confidence
5. More Control on Spending
6. Better quality of life

Conclusion

At the end one most important question is “Are you actually managing your money properly?”. Earning alone is not enough for leading a happy and stress free life, you also need to smartly spend, save regularly, spend on needs and plan the future for financial stability and better quality of life in the long run. Financial discipline is a kind of virtue which the person gains for his good and future well being.