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- First of all, it is very essential to draw up a budget. You know your income, and a budget will help you spend less than your salary. Once you get your budget ready, you will have on hand a ready reckoner which will give you a detailed record of your income and your expenditure. You will have a complete picture of where every paisa has gone. Yes, it is a boring chore, but one that will bail you out too! How else will you manage your finances?
- Do you maintain a separate file or folder for all your financial matters like accounts and taxes? If you want to enjoy sound financial health, this is a definite 'must do'. This is the only way you can get properly organized.
- Whatever your income, just set by a little amount every month as your compulsory savings. Remember, 'Little drops of water make the mighty ocean'. In fact, this should get priority over all other expenses. You will be surprised to find a tidy sum at the end of the year - to splurge on whatever you want - be it a new outfit or a dinner at the most sinfully expensive restaurant. On a long term basis, you can put by an amount that you won't touch till your retirement - and can you imagine what a nest egg that would be? Especially if you are at the start of your working life!
- Set clear financial goals. If you want to save enough to buy a home (or at least the margin money - considering that real estate prices have skyrocketed), afford at least one holiday abroad or buy your own vehicle, the beginning of your career is the best starting point. The realization of your dream at the end of it all is what will keep you going even through the difficult months.
- Beware of credit card and other debts. Remember that interest rates on loans are exorbitant and you will end up paying huge amounts if you are not careful. Pay up your debts and never let them accumulate. You have to be especially careful about credit cards which will tempt you to spend and lead you to definite disaster. You need to pay up in full every month and not just the misleading 'minimum amount' which causes all the trouble. If you can't do so, just destroy your card. It is the most dangerous thing you can carry on your person!
- There is one sphere that you have to be really wary about as it can send all your careful budgeting for a big toss. We are talking here of impulse spending where you end up buying something that attracted you that moment but was not what you really needed. Take a look at the price. Can you really afford it with your salary? Converted into man hours, how much would you have to work for it? The answer you get will give you such a shock that you will think twice before you indulge in it!
- Always be careful about what you put your signature to. Read everything fully before you sign, be it an agreement or contract. You never know what lies between the lines. Ignore this and you will be in trouble.
- Try to avoid doing things that might become addictive and which may lead you to ruin. We are talking here of gambling, addiction to drugs or smoking all of which are highly dangerous and a drain on your finances.
- Never let your money sit idle when it can multiply and earn you more. Discuss with agents and work out the investment model which suits you best. This way your money will be active and not sit wasted in some basic savings account.