It’s always a great time to hit pause and reassess your financial plans. The start of a new financial year is an ideal time to take control of your finances and create a budget to manage your money effectively. Budgeting can seem like a daunting task, but with the right mindset and approach, it can become a simple and effective tool to help you achieve your financial goals.
Livemint spoke to experts who shared some tips that could help you go back to the fundamentals and ensure you’re on the path to mastering your money.
1) Set Clear Financial Goals
Start by setting specific, measurable, achievable, relevant, and time-bound (SMART) financial goals. “This broad approach can help you ensure you are getting the most from your money - whether it’s for saving more or for investing better," said Nikhil Aggarwal, Founder & CEO at Grip.
Satyen Kothari, Founder and CEO at Cube Wealth said one should start by setting achievable goals, such as paying off debts or saving for a down payment on a home. Next, track your expenses and identify areas where you can cut back.
This might mean reducing unnecessary subscriptions or dining out less frequently, he added.
2) Budget & Prioritise Essential Expenses
You probably have a budget but it’s important to ensure that you are giving importance to the right expenses. “So make sure you are paying your credit card debt and rent before you go on a shopping spree online," said Nikhil Aggarwal.
Start by setting achievable goals, such as paying off debts or saving for a down payment on a home. Next, track your expenses and identify areas where you can cut back. “This might mean reducing unnecessary subscriptions or dining out less frequently," said Satyen Kothari
3) Look At What You Automated
It’s also essential to review and adjust your budget regularly to ensure that you are staying on track with your financial goals.
It’s easy to set up an SIP or NACH mandate to set aside money for savings and investments but, make sure you go back and check if the assets you had invested in still make sense. You’ll often find it is important to revise your approach to get the best returns.
Satyen Kothari suggested to use tools such as budgeting apps or spreadsheets to help you manage your money and stay accountable.
4) Plan For Major Expenses
One key budgeting tip is to create separate accounts for different expenses, such as bills, savings, and discretionary spending. All of us have some predictable and major expenses, whether it’s a big vacation, a new home, a new car or a new gadget we need for work/leisure. “It’s important to pen these down in advance and then set aside a budget for them in advance," suggested the founder & CEO at Grip.
5) Get Professional Advice
Perhaps the most underrated tips is to seek help for investing, taxes and areas where you do not have expertise or the time to gain expertise. According to Nikhil Aggarwal, it is often cheaper to get the right advice and direction than to lose money and learn lessons the hard way. So, if you’re planning to invest, it’s always great to hear from a professional finance advisor, insurance advisor etc based on your needs.
It is very important to learn the art of mastering your money through effective budgeting in order to achieve financial stability and take control of your future.
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