5 Tips to take control of your finances and boost financial health

(Representational Image; Source: iStock)


We have often heard– “Time is Money”. But as we practice this well said aphorism to make money, we often miss on managing our hard-earned money within the right ‘time’. While many people like to have a time-bound budget or an investment plan, others seek the help of professionals to maintain a healthy financial trajectory. For many others, the plethora of information available from experts and online can be overwhelming.

There is no denying the fact that being financially healthy is as critical as maintaining a healthy lifestyle. While a healthy lifestyle will reduce your medical bills, healthy finance planning will boost your long-term financial security.

Financial planning varies from person to person. Many believe in long-term investments while others vouch for a short-term plan. No matter what the scenario may be, contributing to maintaining a healthy financial trajectory is important for all.

Here are 5 tips that can help you manage money for a healthy financial future:

• Create your budget and follow religiously: At the beginning of every month ensure to create a budget that includes your assured expenses and calculate how much you can save amidst your regular day-to-day spending. Creating a budget is the first and a very crucial step towards increasing your financial health. It will not only bring discipline to how you spend money but will also give you a transparent picture of where you are spending your money. But be careful while setting the budget. Setting unrealistic goals to save or spend money will de-accelerate the purpose of a budget as it will be impossible for you to follow it.

• Achievable Investment Goals: Setting investment goals that you can achieve is another potent way to have a healthy financial life. Just do not ride your investment ship without well-defined and clear goals. Be SMART and have a plan that is abiding by– Specific, Measurable, Achievable, Realistic, and Time-bound for achieving your financial goals effectively.

• Funds for Uncalled Emergencies: Life is full of Ups and Downs and there is no way out to escape emergencies. You will always be bound by some of the other expense that was uncalled for and if you haven’t planned it properly, you may land in a problem—or worst have to take a loan. As part of your financial planning, you should always consider and be prepared for emergencies that might occur. You might wonder how much funds should be kept aside to deal with sudden emergencies. Well to begin with you should always ensure at least 9 months of your expenses are kept aside to deal with any smaller or bigger emergency.

• Insurance to protect your financial goals: Having insurance is of utmost importance to maintain your financial health. The funds for uncalled emergencies may help you in managing your finances, but insurance is a concrete way to ensure consistent financial health. For instance, in the case of medical emergencies that require hospitalization, health insurance would help you in covering the cost and will reduce the financial burden. Having life, and health insurance not only secures your future but also provides security for your family. The use of insurance in times of need also restricts your bank balance from draining out in one go.

• Grow your savings with the right investments: Once you have started saving money, keeping it in a savings account is not a good idea. Earning an interest of 3-4 percent on your savings might not help you in achieving your financial goals. When it comes to making money, always think one step ahead and that is where investment comes in.

You can grow your money faster with the right investments at the right time. Choosing the right investment policy varies from person to person and their goals. But it is always wise to do in-depth market research and choose which investment plan is more rewarding. Generally, Equity Mutual Funds will give you a much better chance of achieving your goals in a long-term investment plan.

(With inputs from ET Money)