Skip to main content

4 tips to make the most of your money

It's interesting how laying hands on investment-related advice, i.e. the 'dos and don'ts' of investing, is rather easy nowadays. However, there is little information available on how to make the most of one's money.

Following some rather elementary tips can go a long way in not only saving money, but also deriving maximum benefit from it. Perhaps it's the demanding nature of our everyday chores that make us overlook these tips.

In this article, we discuss 4 tips that will help you make the most of your money.

1. Do not allow your money to lazy

Leaving money languishing in a savings bank account is akin to committing a cardinal sin in financial terms. At best, a conventional savings bank account can fetch an annual return of around 3.50%.

The smarter thing to do is to put that money to use by gainfully investing it. Of course, a provision needs to be made for contingencies. However, all monies over and above that should be invested.

For example, you could consider investing a portion of your surplus monies in a fixed deposit. Typically, a 1-Yr fixed deposit with a bank could earn a return of 8.00%-8.50%. If liquidity holds precedence over returns, you could consider investing a portion of your monies in a liquid plus debt fund.

This will ensure that the liquidity aspect is not compromised with; having said that, you still have the opportunity to clock a superior post-tax return vis-�-vis a savings bank account. And should you decide to get invested in alternative mutual fund schemes from the same fund house, the simple transfer/switch facility only adds to the allure of the option.

2. Use your credit card responsibly

The credit card is here to stay. The stereotypical image of an Indian who is averse to buying on credit is increasingly becoming passe. While few would dispute the convenience that a credit card can offer, there are potential perils that you need to beware of.

For example, the option to remit only the 'minimum amount due', instead of the entire dues. This is the minimum amount that must be paid for the purchases made, to avoid a penalty on account of non-payment of card dues.

The trouble is paying just the 'minimum amount due' can be a very expensive proposition in the final analysis, thanks to the prohibitively high rate of interest on the unpaid balance, along with the taxes.

We recommend that you always pay the entire sum due on the credit card. Buying on a credit card is fine so long as you can pay up the entire bill and do so religiously.

3. Avoid penalties

The cliche goes -- a penny saved is a penny earned. And penalties are the one area where every penny must be saved. A delay in payment of utility bills (like electricity, telephone, credit card and insurance premium, among others) results in a penalty being levied by the service provider.
Given the fact that most of us have become pressed for time, late payment of utility bills is commonplace.

Ensure that you pay up all your bills on time and steer clear of penalties. Consider opting for ECS (electronic clearing service) for paying the utility bills. Apart from the convenience that the ECS mode offers, you also stand to benefit from the discounts offered by certain service providers.

4. Track your expenses

Surprised? You might wonder how tracking expenses is related to augmenting your monies. Well, the two are closely linked. Tracking your spending habits closely can go a long way in helping you acquire a better control over your finances.

This exercise can help you weed out wasteful expenditure and come up with ways and means to save money. Depending on the particulars of each case, the solution might vary from going in for discount buys to cutting down on certain expenses.

However, the 'tracking' bit needs to be done methodically and over a long period of time. Using a tracking tool like MyPlanner can go a long way in helping you understand your expense and cash flow patterns.

Popular posts from this blog

Real Returns in Investing

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Real Returns in Investing     A Anil Singh (name changed), 44, works with a private company and believes in investing his entire savings in fixed deposits. His financials from the year 2000 till date is given in the table. Anil's savings in FDs gave him an average return of around 8%. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 49.80 lakh. The value of his investment today is around Rs 66.71 lakh. Naveen Singh (name changed), 44, works in a similar profile like Anil. However his expenses were on the higher side. His financials are as in the table. Naveen invested only in equities. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 38.40 lakh. The v...

Budget 2014 Highlights for Saving

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   The new finance minister Arun Jaitley has just presented his first budget. What measures does the budget contain that will specifically impact savers and investors? Here they are: 1. Housing loans exemption for self-occupied properties increased to Rs2 lakh: Earlier this amount was Rs1.5 lakhs. This move barely keeps pace with the inflation in asset values.   2. Investment limit under 80 (C) increased to Rs1.5 lakh: This is a good move again and offers some relief to taxpayers.   3. IT exemption increased to Rs2.5 lakh, Rs3 lakh for senior citizens. This comes as a minor relief for taxpayers.   4. Annual PPF ceiling to be enhanced to Rs1.5 lakh, from Rs1 lakh: This is in tune with the change in 80C.   5. Long term capital gains tax for debt funds has been rai...

ICICI Prudential MIP 25 - Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential MIP 25     (CRISIL Rank 2)   This scheme was launched March 2004. Please see the chart below for the one, two, three and five years annualized returns from this scheme. The minimum investment in the scheme is Rs 5,000. The asset allocation of the portfolio is 24% equity, 72% debt and 4% cash equivalent and others. Please see the chart below for the monthly dividends declared by the scheme, on a per unit basis, over the last 5 years.   For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call Leave a missed Call on 94 8300 8300 Leave your comment with mai...

Franklin India Smaller Companies Fund - Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Franklin India Smaller Companies Fund   While the universe of small-cap stocks in India is vast, there are very few equity funds which take on the task of sifting through this space for good long-term bets. Franklin India Smaller Companies Fund has managed this with aplomb. What we like about this fund is its significant out-performance of its category and benchmark over the last four years, and its ability to moderate portfolio risk despite investing in the riskiest segment of the equity market. This fund's stock selection strategy, like that of Franklin India Prima Fund is focused on finding companies that generate positive cash flows across business cycles. High return on investment and manageable leverage are also filtering criteria. Says R. Janakiraman, fund ma...

How to open a Capital Gains Account?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to open a Capital Gains Account? You can open a capital gains account in an authorized bank. The Government has notified 28 banks which can open the Capital Gains Account on behalf of the Government. You have to apply for opening the account by filling out the required application form (Form A) and submit proof of address, PAN card and photograph. You cannot withdraw funds from a capital gains account using a cheque book or ATM, like you do in your normal savings bank account. There are procedures to be followed to withdraw funds from the capital gains account. Investment in Specified Bonds Section 54EC of Income Act provide that if the seller invests whole or part of capital gains arising from the sale of asset in specified Capital Gains, within a period of six months of the ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now