Tuesday, October 24, 2017

Living paycheque to paycheque? 5 things you need to adopt

If your salary ends much before than expected, you are in a dire need to adopt these five advices

By Anjali Adlakha

Earning well; spending well, but left with no savings? Living paycheque to paycheque is a way of life that many go through at some stage or the other. But, there will come a time when you will realize this is not the way to go. You will need to save for the rainy day. At the same time, the very thought of earning to live is dangerous and a definite no – imagine working way into your old age because you have to meet your daily needs? If you want a pleasant financial future, here are 5 things that you should get into right away.

Cut on spends: No, I am not your parent who is telling you this. But, this is the first and foremost step to ensure your salary survives till the end of the month and for a few more days. Control your urge to spend, cut down on a cab ride once a week or that coffee that looks so tempting to have from the joint down the office.

Make a budget: Most people, who do financially well, do so because they record their expenses to get a fix on where the money goes. They then allocate for expenses, savings and other important goals which allows them to manage what they have in a better manner. Make a start, improvise on your budget and follow it meticulously. Try and adopt the 50-30-20 rule – 50 per cent of salary for essentials, 30 per cent into savings and 20 per cent for fun and leisure.

Wants and needs: Although there is a thin line between the wants and needs, try to distinguish these two aspects to have a sorted financial life. Spending more for the wants and less for the needs can land you in major trouble. Delay your desires than necessities.

Save for a rainy day: An emergency fund for the worst of circumstances is always recommended. Utilize your increments to prepare well in advance for contingencies. You can also take advantage of your tax returns and festival bonuses and maintain a fund for rainy days.

Invest for the long run: If you have any inclination towards saving and investing, it will always help you to pass the tough times. Start investing regularly through SIPs and achieve your fixed goals in the long term. If you are planning a foreign trip or desire to buy expensive items, begin investing and saving for it from today itself.

anjali@outlookindia.com

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