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Manage Expenses: Five Ways to Never Go Broke Again

Are you someone that likes living life on the edge, from salary to salary, buying something as and when you set eyes on it, without worrying about your savings, and a "dekha jayega" attitude? That may seem cool -- but it's also a short cut to financial disaster. Walnut App CEO and Co-Founder Patanjali Somayaji lists five ways to ensure you don't go broke. Ever.

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Set limits for your spend categories. Make a plan and set goals for yourself.
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Are you someone that likes living life on the edge, from salary to salary, buying something as and when you set eyes on it, without worrying about your savings, and a “dekha jayega” attitude? That may seem cool — but it’s also a short cut to financial disaster.

Walnut App CEO and Co-Founder Patanjali Somayaji lists five ways to ensure you don’t go broke. Ever.

Download a money management app to track your expenses

If you have never been the type to track your expenses, now is a good time to start. You can download an app that tracks your spends and set a budget, keep a watch on your upcoming credit card and utility bill payments, as well as see how much you owe or have to get from others. This is the first step to getting your finances streamlined.

Make a plan and set goals for yourself

Set short-term (a few months ahead) and long-term (a year and beyond) goals. It could be anything from taking up a new hobby like learning the guitar, to buying a new phone/laptop/camera, getting married, buying a new house or being debt-free by a certain date, and so on. Based on the plan, break it down into quarterly and monthly goals so you know how much to save, how much is safe to spend and so on. Having a plan will give you an overview and much better control of your finances.

Set up an emergency fund
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Set up an emergency fund

Once you’re tracking your spends and have set goals, you know how much money you need to allocate to each of them. You would also get an estimate of your spending pattern and expenses for each month. Based on this, have an emergency fund in place that will take care of at least 6-8 months’ worth of living expenses so that in case of a mishap or a loss of job, you don’t go broke, and have something to fall back on. You can set it up so that a certain percentage of your salary/income each month is automatically transferred to this fund. It could be in a different bank account, a fixed deposit, or even a liquid fund — and most importantly, it should be accessible easily and quickly when needed urgently.

Set limits for your spend categories

Take a look at your spends in greater detail to understand where the money goes each month. Assign limits to each of these categories for the month and see how you’re doing at the end of the month. This will give you an idea of your lifestyle and if you’re spending more than you earn, as well as where you can cut down on unnecessary spends.

Stay debt-free

Credit cards can be extremely useful — for regular spends as well as during emergencies, and over time, with a good payment history, can boost your credit score too. However, if you’re the type of person who cannot pay off credit card bills in full each month or who just pays the minimum amount due, stick to using your debit card or cash, or even a Line of Credit, which has a lower interest rate. Revolving credit on a credit card can be dangerous for your finances, and it can take you several years to repay the entire outstanding amount.

Also Read: Day or Night – Which is the Right Time to Study?

There will always be changes in situations, your current needs and requirements as well as your cash flow, so every 3-6 months, you should re-look at your plan and goals, and modify as needed to stay on top of your finances. (IANS)

 

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Paytm Acquires Smart Savings Start Up Balance Tech

Designed to build saving habits for users, the Balance app offers saving options in mutual funds that could get users interest rates of up to 8.65 per cent per annum.

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"Our team has been building automated products that make the saving experience relatable and delightful by helping users reach their goals in clever little ways," Balance Tech CEO and Co-Founder Ankit Kumar said in a statement.

Digital payments major Paytm on Thursday announced the acquisition of Bengaluru-based smart-savings management start-up Balance Tech for an undisclosed amount.

Designed to build saving habits for users, the Balance app offers saving options in mutual funds that could get users interest rates of up to 8.65 per cent per annum.

“Our team has been building automated products that make the saving experience relatable and delightful by helping users reach their goals in clever little ways,” Balance Tech CEO and Co-Founder Ankit Kumar said in a statement.

 the Balance Tech team will be an invaluable part of this journey," said Madhur Deora, Chief Financial Officer and Senior Vice President at Paytm. Flickr
the Balance Tech team will be an invaluable part of this journey,” said Madhur Deora, Chief Financial Officer and Senior Vice President at Paytm. Flickr

“Our conversational personal savings assistant nudges users to build a saving habit, and give purpose to their money as they go about their busy lives.

“We look forward to bringing in computational intelligence, unique design and proprietary algorithms with Balance to help Paytm users accomplish more with their money,” Kumar added.

The six-member Balance Tech team has joined Paytm product and design team and is working on further enhancing Paytm’s user/merchant interfaces, the SoftBank and Alibaba-backed Paytm said.

Also Read: Paytm Refutes Reports of Sharing Indian Users’ Data With Third Parties

“They have created a fantastic product with real user engagement. As we constantly look to create customised and intuitive user experiences, the Balance Tech team will be an invaluable part of this journey,” said Madhur Deora, Chief Financial Officer and Senior Vice President at Paytm. (IANS)