Know how to save money and spend it wisely!
The education a person receives, the position they hold in their career, how well respected they are in society, and, most importantly, how much money they have, are all measures of their growth. We won’t be considered completely successful until we can create wealth and manage our personal finances efficiently.
Joined in a new job! So many ideas running through your mind about how to spend your first salary!
Don’t get too enthusiastic immediately when you start making money. It is critical to begin saving money as quick as possible. This is where financial planning comes into picture.
Have you ever heard about the age-old proverb – `A penny saved is a penny earned’? True. Every rupee saved and invested intelligently leads to wealth building over time. Apart from earning, you should be aware of how much to save and how much to spend.
Spending, borrowing, and investing are the main areas in which you must have a good understanding as a beginner, and even as an investor. Saving and investing money does not imply that you should never spend it. Make sure you don’t become miser. You need to spend money on essentials and utilities, take out loans at some point, and invest to accomplish your life goals. Personal finances must be well managed.
Here are some pointers on how to save and spend wisely so that every penny counts for you.
Kautilya, also known as Chanakya, was an ancient Indian teacher, philosopher, jurist, economist, and royal counsellor who wrote the important political treatise Arthashatra.
“One should start a work only after adequate planning” – Chanakya (Kautilya) 
Before starting any task, it is advisable to make a comprehensive plan; this is also true in terms of personal finance. According to the Chanakya, you will only be able to obtain good results if your work is carefully planned.
Begin savings early: You should focus on saving as quickly as possible after you joined to a new job. Even small amounts of money saved will help you establish a habit to get a kickstart. Over time, the magic of compounding will work in your favour, and your savings might rise dramatically.
First, save, then spend: The general rule of saving is to spend whatever money is left over after you’ve saved it all. You should reverse the process if you spend first and then save what’s left. As a result, income minus savings should be the spending.
Accumulated wealth is saved by spending well in business or in charity or by investing it profitably, just as a reservoir is kept fresh by letting out the stagnant water – Chanakya
Today’s market offers a wide range of investing opportunities. As a result, choose a steady alternative with a long-term value or return. Always invest with a goal and in accordance with one’s ability, since it is preferable to invest the excess of your hard-earned money rather than putting it in a savings account that would provide no return.
Risks must be covered: If you have financial dependents, make sure you have enough life insurance, preferably through a term policy. Also, be sure that everyone in your family is covered by health insurance. By paying a little premium for these risk covers, you can ensure that your savings are not exhausted in the event of an emergency and that your family’s life goals are not affected.
Save your wealth against future calamity … when riches begin to forsake one even the accumulated stock dwindles away – Chanakya
The current crisis at Jet Airways has resulted in the layoff of 20,000 employees. Those who do not have an emergency fund will undoubtedly be affected by their daily grocery, house rent, EMIs, and other expenses.
If you’ve consulted a financial adviser, you’ll know that they all encourage you to start by creating an emergency fund that can cover at least six months’ worth of costs.
Credit card bills: If you have a tendency of rolling over your credit card balances each month, you are seriously damaging your financial position. In some cards, the yearly interest rate is near to 40% or even more. Moreover, if you do not pay off your debt in full, you will not be eligible for an interest-free term on any subsequent purchases. To prevent late fees and other costs, make sure you pay off your credit card bill in full before the due date.
Housing Loan: If you are going for a home loan, keep prepaying it and don’t wait to pay it off according to the terms of the loan. You have to keep in mind, one important point i.e, the faster you pay off the loan, the more money you’ll save on interest. And also, if the EMI burden is comfortably satisfied after household expenses and long-term savings, keep a shorter term.
Make the jump to digital: Use digital platforms for buying as much as possible. Whether it’s for your home, utility bills, or life insurance. Term insurance policies have a premium that is nearly 25% lower than the offline version of the similar plan. And also, you will get cash back offers and discounts on your purchases and utility bills. So that you can save some money.
Obtain More Information:
Learning about various disciplines is like a cow of desire. It, like her, yields in all seasons; Like a mother, it feeds you on your journey. Therefore, learning is a hidden treasure – Chanakya.
One may get a sense of how deep Chanakya’s drive to learn was by looking at his list, which covers practically every facet of life that one can dream of. Not only has he written about it, but he has also spoken about it. In reality, he supported a 20-year-old boy in establishing the Mauryan Empire by applying his knowledge from numerous areas.
Similarly, investment is more about understanding what’s in store for us as investors in other areas than it is about knowing what’s in store for us as financial investors.
Charlie Munger, a 95-year-old billionaire, said in one of his interview with CNBC, “Without lifelong learning, you’re not going to do very well. You’re not going to get very far in life. The goal would have been impossible to achieve if Warren Buffett hadn’t been a learning machine — a never-ending learning machine.” From 1965 – 2017, he earned a 20.9 percent yearly return. How? In his Omaha office, he reads for 8-10 hours every day. He has invested in a diversified group of companies across multiple sectors as a result of broadening his circle of learning. That’s an exceptional track record. Continuous learning is quite beneficial.
Once you’ve established a practise of saving on modest purchases and on a daily basis, the overall result will become apparent over time, and you’ll discover new ways to save even while you’re spending. Both these things can help you save a lot of money over time.