1. Pay yourself first
Saving money is a good habit. Initially you may have to force yourself
to set aside a certain sum of money before you start paying your other
bills, but form the habit of systematic saving by putting aside a
certain percentage of your income. Money in the bank gives one a very safe foundation. There is an old saying that says, "What I spent, I lost. What I saved, I had."
2. Invest wisely
They say that the difference between a rich person and the not so rich
is that the former makes money work for him while the latter works for
money. One must learn to invest wisely so money grows. While looking
for investment options, certain important factors should be taken into
consideration like safety, rate of return, reliability etc. It is
better to take the help of a financial expert. The vital thing is not
to put all eggs in one basket. The best way would be balance your
portfolio by investing some money in fixed deposits, some in shares,
some in real estate and so on. A very easy way of saving is to take out
an insurance policy. Not only will risks get covered, but you will also
save on taxes. As my insurance agent says, "Insurance is the only thing
that is better to have it and not need it, rather than need it and not
have it!"
3. Minimize credit card purchases
Before taking out a credit card it is imperative to read the
fine print. When in doubt, get a clarification. Ignorance is definitely
not bliss, at least not in this case. Even though we cannot totally do
away with credit cards, it's better to minimize purchases through them
since most of the time it leads to impulsive purchases. Interest rates
are high and unknowingly debts keep piling up. Before you know it, you
will find yourself in financial quicksand. Good old 'cash and carry'
works best.
4. Be aware
There are times you cannot manage without taking a loan, like
while buying a house. In these cases the loan should be taken from a
reputed bank. One should be aware of hidden costs, and ask the right
questions. Some banks charge if you repay your loan early, while others
don't. Late fees or penalties should be avoided as they needlessly
increase our expenses. From time to time, one should ask for the
break-up of instalments towards the principal and interest. Where a
person has taken more than one loan, it goes without saying that it is
essential to pay off the higher interest loan first.
Related Articles:
Money Making Secrets - II
