7 Financial Tips For Beginners

Money, money, money! The world runs on money. I know it can’t buy happiness, but it does help with the rest like a comfortable home, basic necessities, good education etc. I liked visiting my granny’s home for the vacations. She was a weird, strong and funny lady. I have wonderful memories of my time spent with her. She gave me lots of advice, both necessary and unnecessary ones. But she does give them freely and frequently. As kids, my sister, cousins and I visited her during the holidays. We used to raid her fridge, check for hidden candies inside big containers.

My granny used to hide her money in unimaginable places. We always end up finding Rs. 20 or Rs. 30, which was big at that time, inside a salt container or the sugar box. We used to tell her about our findings and she always rehid them. When I got older, I used to wonder why she kept money in such places. Is it to hide them from thieves? If she is keeping them safe from her grandchildren or did she forgot about the money? I will never know the truth, but she kept them handy for emergencies. She never told her secret, but she did let out one important piece of advice- “never keep all your fruits in the same bag”. The following are a few easy tips on personal finance that I have come across, I want to share them with you.

1) Every month, keep some money for yourselves

You need to have some money for yourself. I always think this is better because no matter what your needs are you can have them handy. I try to keep 1% for myself ( I always end up spending them anyway. I don’t shop much but I will never know where this goes). This is your money, which comes in handy for your needs and any expense that might spring up on you.

2) Always maintain a report of your expenses and savings

This is simple, you need to know how much you are spending and what it is that you get home. Easier said than done, but you need to keep track of your income, savings, and expenses. You can try various apps to keep your reports in check. I used to manually write them down, Excel does the work for me too. But there are so many apps and websites like Mint, You Need a Budget(YNAB), Wally, Acorns etc available. Some of these apps link directly to your bank accounts and give you a pie chart of your spendings in each category. For more apps check out this link.

3) Know how to use credit and debit cards the right way

Keep an eye on the monthly subscriptions that get auto-renewed. Credit card money is not yours, so don’t use your credit cards often except in emergencies. Use debit cards if you can. Since debit cards deduct money from what is already there, you will think twice before spending.

4) Invest your money

Learn how to invest your money. Talk to trusted colleagues or family members and invest your money in the right place. Remember, investing your money in the right place will help you in the future. Don’t shy away from investing. I am not an investment guru, I don’t even know the proper terms when it comes to investing. But I am trying and if I have enough to put away, I will make sure to put it in a good organization.

5) My favorite point, don’t keep all your eggs in one basket

Diversify your interests. Do not keep all your money in one place. Invest them, buy some gold, get a good property etc. But see that you are not spreading yourself too thin. I am still in the learning stage, so make sure you research properly before making a decision.

6) Do keep a note of how much you are saving

My grandparents used to follow the 50-50 rule. They used to save half of what they get and remaining they would spend. Nowadays, savings have become more difficult with the student loans, house mortgages, bills to pay, basic home necessities and growing cost of rents. In India, the current scenario is that we can’t even dream of own houses and real estate prices seem to sky rocket. I am sure people around the globe are facing the same scenario. But if we can save some amount of money that will be helpful in the future.

7) Plan for your retirement

Always, think as if you were going to retire the next day, how much money will you get to have for the rest of your life. And work towards it. There are different retirement plans that companies offer. If you are in the US, be sure to look up for 401(k) plans which cater to your needs. If you are in India, do check out the local banks as well as LIC retirement plans.

The above pieces of advice are the ones which I remember. These are all common pieces of advice, but worth remembering. For more advice do read Dave Ramsey’s books like baby steps, Financial Peace, The Financial Peace Planner, The Total Money Makeover, and other books. It was like sour medicine in the beginning. I couldn’t keep track, but I slowly realized I need to adopt these instead of just remembering. It is a work in progress but I am able to save some 5% of the money, which is big considering I wouldn’t have even thought about it. I am still trying to figure it out. But, this is the first step towards managing money. Hope you find this useful.

Love,
Pooh