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14 July 2020 | 5 min read

 6 Things To Do On Your Payday So That You Can Manage Your Money Better

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Proper money management does not require you to be a math wizard or be hard on yourself, but it is about more than just making ends meet. Life is much easier when you wear some financial skills up your sleeve. If you’re struggling with money management issues such as living paycheck-to-paycheck despite making more than enough money, then these tips will come very handy to you. 

If you are one of those who and has several bank accounts, credit cards, a retirement account, etc. many-a-times getting a grip and fully understanding your financial state might seem daunting and an uphill struggle. One of the key measures to keep in mind is that just because the money is there doesn’t mean you can make the purchase. You also have to consider the bills and expenses you’ll have to pay before your next payday. If you don’t take the proper steps to get organized and get down to learning ways for better money management, you’ll feel like you are swimming against the current.

Here are some tremendous tried-and-tested strategies you can learn how to manage your money effectively. 

Plan A Budget

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This is the very first step to climb the ladder of financial control: Create a budget if you haven’t already. Are you still wondering if this is necessary? Then think about why windshield wipers are essential during the rain. Yes, the same reason! There’s no escaping from planning your budget. 

Creating and sticking to a budget might seem a little harsh to achieve at first, but it pays off in the end {no pun intended}. The act of budgeting helps us view our financial situation with full transparency, and this is of utmost importance for better money management. It’s like accelerating in first gear towards paying off debts and start saving for future expenses such as a home, a car, and your retirement. It’s what will bring balance to your financial life and give you peace of mind on a platter. 

Understand Your Expenses & Prioritize

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How much money do you spend in a month? Can’t think of a definite number? Well, most people cannot, so don’t feel guilty because being unaware is a common dilemma. Although there’s an easy solution – Keep track of all your expenses for one month. Save all your receipts {utilities, groceries, restaurant bills, etc.}, scroll through your bank statements, and add up all of your expenses. Don’t forget the cash and credit card expenses, though.

The idea is to have all your costs {both fixed and variable} accounted for to get a total amount. This will allow you to see the whole picture a plan better. You will also want to compare your performance over time. Being self-aware is an excellent achievement in itself, brace it!

Create An Emergency Fund

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Considering we’re living a pandemic-life in 2020, anything can happen anytime, and it’s good to be prepared. Emergency funds are an essential part of a healthy personal finance plan. In almost all cases, you shouldn’t touch or take money out of the fund; instead, let it sit there earning interest. If you lose your job or an unfortunate or unexpected expense arises, such as your car breaking down or a tree falling on your roof or even falling sick, this is when you should tap into it. 

Overall, stay well-informed, practice sound financial management to enjoy a stress-free life, and perhaps one day you will be the next personal finance guru and have thousands, if not millions, of people sharing your content and seeking your expertise on the best way to manage your money. Anything is possible, remember? Many others have done it, and so can you. 

Start an emergency fund here.

Consolidate Your Debt

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The dreadful word that encourages escapism – ‘Debt’ – No one likes it. The truth is that most people that need help managing money need help to get out of debt. Sounds familiar? If you are like the majority of Indians (67%), then you most likely have liability*. The first thing to do is to get it under control and work on getting rid of it. If you have credit card debts, any loans, or other liabilities; look to consolidate them and try to get the lowest interest rate possible. Again, it’s all about taking the right steps to control your finances.  

There are convenient options out there that allow you to combine several unsecured debts such as credit cards, personal loans, and payday loans, into one bill rather than pay them individually. If you only have a single obligation and are on a tight budget, try spending at least the minimum amount as soon as you’re your salary hits your account. In case you manage to open alternate channels fo income, try to make the same payment a few weeks later (Before the next official due date). Try keeping this payment cycle going until your debt is fully paid off faster than ever.

 Slash Unnecessary Expenses

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Are you a big fan of Starbucks? If you are buying a Venti Caffe Latte every day (as delicious as it is) that’s around INR 280 out of your wallet. Multiply that out, and you could be spending about one lakh rupees a year just on coffee! Maybe, just maybe, consider making your blend at home or buy store-bought brews to pinch those pennies? Paying for a gym membership but doing yoga in your backyard? Cancel it. Subscribing to 3 magazines but only reading Vogue? C’mon! 

 Think hard about all the things you are paying for but could live without and don’t need. Remember, the idea is to learn how to improvise on financial management by taking every penny into account. So, do some seasonal cleaning and slash expenses wherever you see an opportunity and especially if it’s something that doesn’t affect your life to a great extent.

Use A Personal Financial App

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Your finances are already complicated, let’s change that. How do you ask? Begin by evolving with the time and putting away your Casio calculator. There are new and free tools out there that will show you systematic and easy ways to manage money as well as perform all the hard budgeting tasks on your behalf. 

The digibank app is the most convenient and trusted place to begin your financial journey. Besides helping you organize smoothly, it also allows you to transfer money for free, invest in Mutual Funds without transaction charges, get instant loans & instant health insurance, also lets you view all your other bank balances in one single app. 

Click here to download the digibank app on your phone or desktop.

* Source here

by Megha Panjabi
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