Frugal Living

Why People Need to Take Responsibility for Their Finances

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Someone has very rightly said that saving money is earning money. Most often, people are seen worrying about how to make money. They need to manage the money that they already have. While cash inflow is essential, using your wealth and protecting funds is equally important. Proper money management ensures regular inflow of funds and should be learned early. Money management doesn’t require a degree in finance; by learning a few essential financial tips, you can protect your funds and secure your future financially.

Keep track of your expenditure by making a monthly budget

Having a monthly budget instantly improves your finances. It has worked for ages and is the simplest way to inform yourself about your expenditure. To make a budget, evaluate the amount of money you spend on monthly bills, groceries and lifestyle. Set a margin and fix your monthly savings amount. You can open a recurring monthly deposit for preset savings. This way, you can control your expenses and organize your savings. Various apps help you manage money by keeping track of your spending and alerting you when needed. Staying aware of your income and savings also increases self-confidence.

Have unalterable monthly savings plans

Everyone must have an emergency fund for backup in unexpected situations. But most of us don’t have any because as soon as our savings mature, we tend to use them for lifestyle or entertainment rather than keep adding to it. Consequently, we have to take loans at high interest rates or borrow from others. Building up funds takes time but it is going to strengthen your financial security when you need it the most. So start a recurrent deposit and forget about it.

Eliminate unnecessary expenditure

Sometimes we keep paying for things and services that we no longer use. Some people take yearly subscriptions for online streaming platforms, magazine subscriptions, TV channel subscriptions, gym memberships, software subscriptions, online social group subscriptions and online storage services. You may be using these services for a few months but they lose charm over a longer period of time. Most of these services are on auto renewal if you don’t cancel the subscription. So you keep spending on them without using and even knowing about them. You should keep reviewing your subscriptions and memberships so that unnecessary ones can be cancelled.

Use Cash, Not Credit to make payments

Generally, when we keep making online payments using digital payment apps, we tend to do unnecessary expenditures. Making online payments is easier and quicker. Most online portals offer promotional deals and discounts that lure buyers. Increased availability of options also results in impulsive buying. By making payments with cash, you will have a better idea of the expenditure. If it seems difficult to carry cash, opt for debit card payments to avoid using a credit card at all costs. It is just like taking a loan and if you fail to pay off the balance every month, it adds on interest. Credit cards should be kept for emergency payments only.

Educate yourself about the Taxes you are paying

If your salary is taxable, you should know how much tax you are paying. When you join a new company with an elevated salary, ask an expert to calculate the tax amount and how much money you are left with after paying taxes for your monthly financial needs and savings. Look for an online salary and tax calculator for help. These apps can evaluate your after-tax salary, gross pay and net pay giving you a better idea of how much you can spend and save. 

Check for any grants or subsidies that might be available

In many ways this is related to educating yourself around tax. Many governments offer a number of grants or tax subsidies to help individuals. For example, South Africa provided one of the largest social grants, the SASSA status grant, which provides additional income each month to unemployed individuals. As well as income support, there may also be subsidies and tax breaks available to self-employed individuals. 

In Conclusion

These are the first steps to be taken toward ensuring financial security. Remember there is no age to start saving money. Even if you can make small investments, it is going to increase with time. Making these small little changes in the way you spend and save will make a huge difference in your financial position. Start budgeting and stick to it. Keep in touch with a financial expert who can guide you through the process of saving money by making you aware of new schemes and plans.

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