Never seem to have enough money? Here’s how you can change it

Here are some simple ways to add a few pennies and cents to your net worth so you can finally stop thinking about those travel bucket lists or a dream home and can start working towards them with the one resource that you almost always have in control – your salary.

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Your bank statement is a balance sheet

A mindful study of your bank statement at the end of each month will tell you whether you are operating at a loss or not. We love credit cards and they are easy to get one these days. But before they enable your vicious cycle of short-term gratification through medium to large expenses that are not exactly debt free, find out the difference between your cash outflow and inflow. As this realistic Scroll article points out, “Let’s call this phenomenon for what it is – living beyond your means. Just over a decade ago, pink papers were full of stories of urban India being leveraged to their eyeballs, and households earmarking 70 percent of their disposable incomes towards EMIs. Those were stories of people living beyond their means. The trend continues even today.”

Make a budget

It is important to take into account of your cash inflow and outflow. An uncomplicated list of expenses and income can really clear all doubts. Nothing explains money like just taking a few minutes to add up the numbers.

Follow the 50-30-20 rule

I have found the 50-30-20 rule to really work, especially when you are just getting started with building a financial cushion. The rule says that 50 percent of your income should be spent on needs – rent, fuel, food, etc.; 30 percent on your wants – that weekend getaway, new bag or shoes; and 20 percent is purely for debt repayment or savings.

Figure out hidden costs

Figure out hidden expenses such as your credit card interest, a phone plan that gives you more data than you will ever use, gym membership, etc., and do away with it.

Pay off your credit cards

You might think that you are getting away, month after month, by just paying off the minimum amount. But you are only collecting debt. Pay it off. Don’t owe money when you don’t have to. Minimising your credit card expenditure and using disposable cash instead might help you control your cash outflow better.

Start saving – even if it is a small amount

I haven’t stopped raving about recurring deposit since the day I figured out what it was. Go over to the tens of good websites that will teach you a thing or two about saving and investment and don’t be afraid to ask financially responsible people for advice.

Set financial goals

Like most things in life, set annual financial goals for yourself. And don’t make it entirely dependent on your salary hike – that isn’t always in your control. When you achieve it, reward yourself. But not by spending all of it.

Following your passion and romanticising the trade off between money and love is all very well but not everyone has the backing of an inheritance, and not everyone wants it either. Get prudent and who knows what you can achieve and/or experience with a salary that, at least at the moment, seems to stare back at you like a funny meme. It is never enough and it is never too soon to start.