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.
