A good number of folks are in debt. However, income varies from individual to individual. While one may earn enough to provide only basic necessities, another might be able to afford the most comfortable car in the market just for his newborn child! Now, who has debt? Obviously the one with lesser income has more chances of being in debt compared to the one who is born with a silver spoon. You wanted to clear your debt and you did it! But you are worried that you might fall into debt again.
With the low income you have, staying out of debt becomes more important. How to stay out of debt with a low income? Moneymindz, India’s First Free Online Financial Advisory
1. Begin budgeting
A budget means keeping track of your money. It consists of your monthly income, monthly expenses, savings, investments, insurance, financial goals and the time frame by which you want to achieve them. This will help you notice where your money is going. Once you have done that, replace some money from the expenses and put it into your investments. Each month, put some money into savings and use the rest of the money for your monthly expenses.
2. Say no to Instant Gratification
Thanks to the endless Human Greed combined with all those advertisements and easy access to money and all the items you see in sales, instant gratification has become a norm. People purchase without even thinking if they really need it. They do not know the difference between “needs” (basic necessities like food, water, shelter, clothing and medicine) and “wants” (greed for more). Delay gratification has to replace instant gratification if you want to stay away from debt and save money for the future. Moneymindz, India’s First Free On call Financial Advisory
3. Do it the old fashioned way
Walk around with cash instead of carrying cards or online shopping. Thus, when you know you have limited cash in hand and that you are actually giving away cash each time you buy something, you will instinctively limit your expenditure. On the other hand, carrying cards will make instant money transfers and you will not even realize how much money you are wasting.
4. Save for Emergencies and Retirement
Investing means taking advantage of the “Power of Compounding” which is why people invest. You should have an Emergency Fund which contains at least 6 to 12 months of your monthly income so that you don’t drain your savings in case of emergencies. Similarly, with rising nuclear families and disintegration of joint families, rising inflation, rising life expediencies and lowering of healthy lifestyles, having a Retirement Fund is an absolute necessity. Smart Financial Advisor, Kuber Mindz
For more information visit www.moneymindz.com or give a missed call to 022-62116588