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Tuesday 3 July 2007

How does Money Fly???

I have observed lot of times people fretting about money vanishing without notice…. Even the It folks do not fall back as an exception… While people consider IT Folks blessed with fat pay cheques…Does this not sound strange???

It is a well known fact that people who do not know how to manage money fall a prey to the order of impulsive buying and give up the need to control and audit the cash flow….

Now why does this become Important….? If you are not aware of the Principles of Cash Management, I am afraid that you might have to pay a high penalty in due course… and lose your valuable money

Principles of Cash Management: Do I need to get a Degree/Enroll for a specific course?

Fortunately, the Solution to this is basic numerical knowledge which we all learnt in school

How do we do that?

Simple…. Income Vs Expenses… Looks easy…However the Key is how you categorize your Expenses?
Maintaining an Expense Sheet on Monthly basis helps you to identify your Spend Thrift Areas/ Regular Dues and Impulsive shopping... ( Use a Digital Diary/small notebook to recollect all your expense for the day for different categories)

Some of the handy tips to keep your Cash Flow and Expenses prudent …

1. Discourage the usage of Credit Cards. It is better to use Debit Cards, so that you see the Money reduced immediately from the Cash Reserves
2. Planning to Go for Shopping – Go with a predefined list and stick on to it…(This will be difficult initially but will help you in the long run)
3. Make Investment – Periodically in different Instruments ( Mutual Fund/Banks/Housing) based on your Risk Capacity
4. Today, you have A/C in 3-4 banks. Make sure your spending goes from one dedicated A/C. This will help you to track and consolidate monthly
5. Allocate a Budget every month and stick on to it… ( Your Expense Graph will indicate your Stop Spending Areas)
6. While Purchasing Groceries/Food Material/Fruits ask on the Cost and Seek the best shop that gives your goods with nominal rates and good quality ( Super Markets)
7. Even When you use Food Coupons be cautious in spending ( After all they also come from your money)
8. Maintaining Orderliness in Home/Offices: Most of the time, we do not have time to search for items and we invariably land up in adding duplicates.
9. Reusability should be aimed at in all possible areas. ( Water/Paper/Clothes)
10. Read Magazines like Money Control/Naanayam (Tamil) which have wealth of tips to improve your financial Style…

I have been able to Track /Monitor by Spending since I started my career and it has given me some valuable insights to the idea of Financial Management… Wanted to share some of them….

If you are more interested, I will be happy to share some of simple tools/templates that can aid you Manage your Expenses brilliantly!! Do pass on your comments and Suggestions as always

Regards
Gps

1 comment:

Dew Drop said...

Makes Sense.. This is exactly what people of this generation are lacking... :)

More insights on these would help one and all :)

Nice write up,

Deepa

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