If your financial life is driving you nuts due to its complexity, it’s a no-brainer that you have to make it simpler. But if you don’t know how to make things simpler here is what you should do.
1. One financial goal at a time
Multitasking creates more complexities for you here. So the key is to focus on one goal at a time. Focus on your short-term goals first. When the clutter or confusion is getting cleared, start focusing on your midterm and large term goals. A short-term goal lasts within 3 years while a midterm goal is for 3 to 5 years and a long-term goal is for more than 5 years. So do one thing at a time rather than pretend you are the master of multitasking. Learn to prioritize. India’s First Free Online Financial Advisory, Moneymindz
2. Ward off excess credit cards
Just one or two credit cards is sufficient. You don’t need more than that. The more credit cards you have the greater risk of identity theft, more miscellaneous fees and cluttered reviews of credit cards. Carrying cards encourage you to spend more. After all, it’s so easy to do online shopping, walking around with a card instead of cash and the like. This is exactly the way to lose money and complicate your finances.
3. Do it the old fashioned way
Take a pen and paper and start your budget. Doing it this way will make you notice where your money is going. Then increase your savings and investments each month as you reduce your expenses. India’s First Free On call Financial Advisory, Moneymindz
4. Buy adequate insurance according to your needs
A fair amount of Term Insurance and Health Insurance, one plan each. Nothing more, not even those add-on services. Don’t neglect getting insured. A Term Insurance will be of help to your dependants if you leave this mortal world suddenly. Health Insurance will be of help when you are hospitalized so that you don’t drain your savings. Don’t conceal any information, be it the medical history of you and your family or your lifestyle diseases. Check if the Insurance you are buying will protect you adequately and read the Terms and Conditions.
5. Spend less than you earn (and invest the saved amount)
Don’t spend and overspend. Save more each time you earn or spend. For instance, if you earn 5000 Rupees per month and you spend the entire amount till now, consider saving 1000 Rupees from the next 5000 Rupees and increase the saved amount each time. This will go a long way in simplifying your finances, saving for the future and even getting out of debt or ensuring you don’t fall into debt. Of course, you should never be a miser! Don’t beat yourself up for this! Do everything in moderation and within limits.
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