If someone gives you a hundred dollars and asks you to go and spend it, then how would you react? Well, the answer is quite obvious. Not just you, but anyone in your situation would be just thrilled. However, if the same someone gave you a hundred dollar note and asked you to double or triple it, then what would your reaction be? Yes, that’s correct. You would not be happy and in fact, might even return it to the person saying you are not interested.
The situation is like this with many of us. While spending money may come easily to us, managing money is something that most of us need to actually learn. Therefore, let’s start this easy tutorial of managing money by first developing some of these simple habits and practices.
- Start by the simple saving rule. Decide on a cut, be it 10%, 20%, 50% or even 90%, and invest this amount.
- Additionally, while investing, go for multiple investment options rather than concentrating all your savings into just one investment plan. Investment portfolio diversification is always a good and safe habit of managing your finances.
- Moreover, get into the habit of automating your finances. By this, experts mean that you should get into the habit of crediting money into your saving accounts or other investment options automatically rather than doing all of this manually.
- Simultaneously, do an analysis of your spending and cut down on unnecessary expenses. For instance, ditch going to the supermarket often to get a few items rather go once a month or order online. This way you will not buy unnecessary things. Moreover, you can also skip your usual cafe and probably switch to homemade morning beverages.
- In addition, think of saving that extra cash when you land on some instead of spending it or throwing a fabulous party. For instance, when you get a bonus, a raise in your salary, or some inherited money from your grandparents, do not blow it all up instead save this additional amount.
- Further, do not let your money saving tendency stop with these. Rather make goals and plans that involve money. By this, you are not expected to go on an extravagant vacation you cannot afford. Instead, make plans of buying a home, or investing in a property, and other such similar ways to multiply your investment portfolio.