How to make the most of your money!

Sep 20 2013, 18:56 IST
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It is often misunderstood by many that earning and investing are alone sufficient to be wealthy. Reuters It is often misunderstood by many that earning and investing are alone sufficient to be wealthy. Reuters
SummaryIt is often misunderstood by many that earning and investing are alone sufficient to be wealthy.

insurance premium. As most of us lead busy lives, it is but common for us to forget paying our dues on time. It is advisable to keep reminders to pay bills on time. Using the Electronic Clearing Service (ECS) or the Auto-debit mode from your bank account to billers will make life easy when you pay your utility bills. This has two benefits - one is you will avoid paying penalties, which means you save on this amount. The other benefit is that some service providers offer you discounts when you opt for ECS payments and pay your bills on time. This also means you save money.

Donít let your money stay idle in your account: Rakesh had his salary account with ICICI Bank, which offered him 4% pa interest. Every month, Rakeshís company used to credit salary to this account. After withdrawing money for his monthly expenses, Rakesh left the remaining amount in this savings account itself. After 8 months, the balance in his savings account increased to Rs. 3 lakhs. Due to his busy lifestyle, Rakesh did not bother to direct this amount to useful investment avenues, which resulted in a hefty loss for him. This amount if invested in a fixed deposit earning 8% interest per annum could have given Rakesh Rs. 24,000 as interest in a year. Alternately, this amount can also be invested in a liquid plus mutual fund, if liquidity is of importance. However, Rakeshís negligence has cost him dearly. If you are a busy individual with no time to track your money, the least that can be done is to opt for a sweep facility in your savings account, where any excess over a stipulated minimum amount is automatically transferred to a fixed deposit account earning higher interest.

Track your expenses: Although this may not seem to have a connection with increasing your money, tracking your expenses over a long period of time helps you in cutting out unnecessary expenses and brings about a discipline in your spending patterns. You will be able to find out the heads where you spend the most, thus forcing you to think how to cut down expenses. It is recommended to use a financial tool which will help you understand your expenses and cash flows.

When you follow basic tips to make the most of the money you have, you will be reaping the twin benefits of both saving money

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