Why you should make a monthly budget, emergency fund before investing: Women who want to embark on the journey of investment should understand that it is better to save before investing and it is better to make a monthly budget before saving. When you keep track of your income, all types, and expenses, all types, you are in a way taking control of your finances. Whenever you make a monthly budget, keep it flexible so that you can make changes in it as per the need. There should be scope for necessary changes. Follow these five steps as you navigate budgeting, emergency funds, and investing:
1- When you make your monthly budget, include your total costs in it. Be sure to include expenses like all types of bills, EMI of home loan or auto loan or any other, travel expenses, all types of bills, kitchen-grocery-laundry items etc. Once you make a budget, stick to it but also keep reviewing this budget. Divide your expenses into categories like mandatory, weekly, quarterly etc. For more such information related to women and personal finance, you can click here.
2- Do not ignore the benefits you get from time to time like coupons, cashback, sales etc. Take advantage of them and ensure their participation in planning. Discounts, cashback etc. are often available on groceries and household items. These are especially available when purchasing goods in bulk. Prefer weekly, monthly storage as much as possible. Many online stores and offline stores run loyalty programs. Join these and avail the benefits that come from time to time.
3- Making a budget is not just writing down expenses on paper. It also has to be seen where cuts can be made and where the inflow of money needs to be increased. Do not leave AC, cooler, TV running unnecessarily. Use devices that can track and/or reduce unnecessary consumption by your electronic appliances. You yourself will realize that you are able to save money by reducing the expenses on utility bills.
4- You will feel that saving starts not after budgeting, but with budgeting itself. If you want to save, first create an emergency fund. For more information about this, click on this link. With this fund, you can also give priority to debt management i.e. repaying the taken loans as much as possible and as quickly as possible. Also read- Buy only if you want to live in the house, otherwise do not buy for investment! Expert told the mathematics which you might not know till now
5- After regular and disciplined compliance with budget and savings, comes the turn of investment. However, to take investment decisions, consult a financial advisor. Do complete research regarding whether he is a SEBI registered and qualified advisor. On your part, instead of keeping money in savings accounts, invest in mutual funds through PPF, insurance, savings schemes like NSC, SIP. You can get more information about this by clicking here.
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FIRST PUBLISHED: April 30, 2024, 14:56 IST