Skip to main content

How to build good relationship with money

 

We live in the real world, where life is not based on songs, but of dreams and goals that you want to fulfill.

A client of mine, when came to me for the first time, was bewildered regarding his financial situation. He knew that he wanted to realise and complete his goals and dreams, but was so sure that he did not have the right amount of resources to do so.

The first few minutes into the meeting he kept talking about how if he had a little more money, he would have been able to fulfil them sooner. After listening to him intently, I realised that it was not that he did not have enough resources to fulfil his dreams and goals, it was just he did not have the right relationship with them.

This is a common situation that is persistent in every household. At least one member in the family is unaware how to handle and maintain their finances.

Though not a very common practice, not many people know how to maintain a good long lasting relationship with their capital, in such a way that not only serves them in the present but also will help them accomplish their dreams and goals, without a glitch.

Altering your spending habits is the answer that you are looking for.


Analyse how you spend your money: Spending patterns often depends on one's moods or situations or events. Look at your credit card bills and analyse the same with the corresponding date and you will find out a pattern as to how you spend your money.
Spend but carefully: No financial planner would ever tell you not spend any money.
There are the basic needs that have to be fulfilled. Instead of splurging your resources on unnecessary items that you will use only once, find a non-expensive alternative that will not only fulfill that need but also make sure that you have not created a dent in your pockets. Reinforcing is the key: Psychologists often speak about negative and positive reinforcements in life that would help alter behavior of an individual. Try the same when it comes to your finances.

I started this project with a client who would spend money without a second thought. This was hampering one of the goals she wanted to achieve. To make her understand the importance of this, we set up a little project.

Every time she spent large amounts of resources on frivolous demands, her spouse would negatively reinforce her and would make her invest double the amount she spent, for a fixed period of time.

This enabled her to be careful as to where she spent her money, as she realised that there was a higher amount of resources going out then coming back in.

Look for alternative plans if you feel that your current plan is eating up too much into your savings. Your financial planner can help you get a simpler plan that will help you to invest less in a smaller amount of time, so that you don't have to face a financial crunch in your present.

Ignorance is not bliss when it comes to your debt situation: Try not to pile up your old bills and settle them as soon as possible. One folly that most people do is they collect and pay all their bills together.

This, at times, eats up a larger portion of your resources, as you may miss your bill date and end up paying more than the required amount.


Look for bargains that can help you financially: A well to do client of mine used to consider this to be a thrifty activity and never attended sales. I explained to him that bargains not helps you finds the best deals but also helps you to invest your resources in a better way.

The future of your money lies in your hands. Altering it and understanding it is the first step to a healthy financial life.

 

Popular posts from this blog

How to Decide your asset allocation with Mutual Funds?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) How to Decide your asset allocation ? The funds that base their equity allocation on market valuation have given stable returns in the past. Pick these if you are a buy-and-forget investor. Small investors are often victims of greed and fear. When markets are rising, greed makes the small investor increase his exposure to stocks. And when stocks crash to low levels, fear makes him redeem his investments. But there are a few funds that avoid this risk by continuously changing the asset mix of their portfolios. Their allocation to equity is not based on the fund manager's outlook for the market, but on its valuations. Our top pick is the Franklin Templeton Dynamic PE Ratio Fund, a fund of funds that divides its corpus between two schemes from the same fund house-the...

Mirae Asset Healthcare Fund

Best SIP Funds to Invest Online   Mirae Asset Global Investments (India) has launched Mirae Asset Healthcare Fund. The NFO of the fund will be open from June 11, 2018 to June 25, 2018. Mirae Asset Healthcare Fund is an open-ended equity scheme investing in healthcare and allied sectors. The scheme will invest in Indian equities and equity related securities of companies that are likely to benefit either directly or indirectly from healthcare and allied sectors. The investment strategy of this scheme aims to maintain a concentrated portfolio of 30-40 stocks. Healthcare is a broad secular theme that includes pharma, hospitals, diagnostics, insurance and other allied sectors. The fund will have the flexibility to invest across markets capitalization and style in selecting investment opportunities within this theme. Neelesh Surana and Vrijesh Kasera will manage this fund. In a press release, Swarup Mohanty, CEO, Mirae Asset Global Inves...

Ulips are still good bet If you understand the product well

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   OVER the years, life insurance has usually been synonymous with life protection for the family of the policyholder upon his death. However, these days, it offers a lot more. In order to meet demands for better returns on insurance, unit-linked insurance policies ( Ulips ) were designed as a dual-benefit product. This product is a unique way to invest in the equity market along with getting the benefit of a life cover at the same time. What makes Ulips even better is that it is one of the most transparent financial products at present available. Ulips have appeared more beneficial for the customer after having gone through a lot of regulatory changes in the recent past. Some of the reasons that it is still a good bet are as mentioned below. Better returns: Following the rev...

IIFL NCDs

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India) IIFL NCDs IIF's six-year unsecured NCD 2012 Risk-wary investors should stay away from this issue, and even, risk-taking ones should think twice It is a public issue of unsecured redeemable non-convertible debentures ( NCDs ) by India Infoline Finance ( IIF ), an unlisted company, which is a 98.9 per cent subsidiary of India Infoline, a listed company. The issue seeks to raise Rs 250 crore with an option to retain over-subscription up to Rs 250 crore taking the total potential issue amount to Rs 500 crore. It will be open for public subscription from September 5 to September 18 with a minimum application size of Rs 5,000 in the form of five NCDs of face value Rs 1,000, TENURE & RATES: IIF will redeem the NCDs at the end of six years, and investors wanting out before six years will be able to sell the...

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...
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