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

Surrender ULPPs

  ICICI Pru LifeTime and ICICI Pru Lifestage are Unit Linked Pension Plans. Such insurance linked retirement plans are neither good investments nor do they offer sufficient insurance cover. As you can see, these have turned out to be bad deals. In the Lifetime plan, the fund value is not even equal to the total premiums that you have paid and in the Lifestage plan your return is just about 6% which is quite low. The mortality charges are as per your age which is why they have increased. Moreover, once these plans matures, you will have to compulsorily opt for annuity (regular income) and the annuity rates are generally modest. Assuming these plans mature in the next one year, it will be wise to surrender the plan now and curb your future commitments.   Before you choose to buy a term plan, you have to consider a few points. You need to insure yourself, only during the time you are working and your family is financially dependent on you. At the age of 59, not all insurance companies w...

ICICI Pru Constant Maturity Gilt dividend

Invest ICICI Prudential Constant Maturity Gilt Fund Online ICICI Prudential Mutual Fund   has announced dividend under the following schemes: Scheme Dividend ( R /unit) ICICI Pru Constant Maturity Gilt-DQ 0.26543239 ICICI Pru Constant Maturity Gilt Direct-DQ 0.27171609 ICICI Pru Q Interval Plan I-D 0.10617296 ICICI Pru Q Interval Plan I Direct-D 0.10703967 ICICI Pru Q Interval Plan I Ret-D 0.10617296             The record date has been fixed as June 13, 2016.   ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) ...

Sundaram Mutual Fund new plan Sundaram Fixed Term Plan CJ

Sundaram Mutual Fund has announced the launch of a new fund named as Sundaram Fixed Term Plan CJ. The new issue will be closed for subscription on January 30. --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available are: 1. HDFC TaxSaver 2. ICICI Prudential Tax Plan 3. DSP BlackRock Tax Saver Fund 4. Birla Sun Life Tax Relief '96 5. Reliance Tax Saver (ELSS) Fund 6. IDFC Tax Advantage (ELSS) Fund 7. SBI Magnum Tax Gain Scheme 1993 8. Sundaram Tax Saver   -...

Group Health Insurance

Buy Group Health Insurance Online   For Human Resources, the biggest challenge today is to decide whether medical benefits should be offered to employees or not, what type of plans should be offered, what will be the cost and how will the cost be split between employees and employer. Well, most of these are subjective and would depend on a lot of factors including company size, average employee salary, etc. However, this article will give you a fair idea on how you should go about deciding these factors: 1. Why offer group health insurance benefit to employees : Studies have proved that retention rates among employers offering GHI are much higher than the ones who are not offering. Moreover, the cost of providing this benefit as a percentage of salary is very low as compared to the perceived value. As an example, say if average salary of an employee in your organization is 4 LPA. If you decide to offer a health insurance benefit to him for a Sum insured of ...

Choose gold ETF over Physical Gold

Investing in gold is overall a good portfolio hedging strategy as long as gold does not account for more than 5-10 per cent of your investment portfolio. Between physical gold and gold ETF, investing in gold ETF is a better proposition because these funds invest in physical gold making them the closest to investing in physical gold at no risk of holding physical gold.   You will need to have a demat account to invest in gold ETFs and there is little to choose between any of the gold ETFs, you can pick any fund that you wish to as long as you pick the fund with the lowest expense ratio.   -----------------------------------------------------------------   Also, know how to buy mutual funds online:   1) DSP BlackRock Mutual Funds: http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html   2) Reliance Mutual Funds: http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html   3) Reliance Mutual Funds: http://prajnacapital....
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