saving money – The Metrognome

Be your best money manager for 2024

We’ve got easy personal finance tips and some budget app tips to end year 2024 better than it started.

by Mr Paisa Vasool

At the beginning of this year, you had the highest hopes of yourself. You were going to get that promotion this year with sheer hard work – or change jobs – go on an international trip, invest in a good bunch of stocks, and manage your money much better than you normally do. Indeed, you may even have achieved the other goals already. But can you say you’ve been the best money manager for your money?

There’s still time for some course correction. Here’s what I would do if I wanted to become my best money manager for 2024:

#1 Do not buy bank-recommended financial products. If you already have, try and get out of them by either redeeming them or reducing their term by converting into a better product.

Sure, your relationship manager at your bank is your best friend, and they recommended ULIP and guaranteed returns plans which were supposed to be the best thing since sliced bread. But, they really are not. Most bank-recommended financial products are pitched with the sole purpose of making employee targets for the year. They might not necessarily give you the high returns you expect.

Redeem the policy or product if you can. You might not make much money with this approach, but at least you can get your invested sum back. If not able to redeem, check if it can be converted to another plan with better returns. If nothing is possible, you will have to sit with the product till it matures.

#2 Pay yourself first every month.

High unemployment and upward-creeping inflation notwithstanding, it is not impossible to save money every month. If you’ve been unable to save much money this year after juggling all your expenses, here’s what you’re probably doing wrong – you’re trying to save money after you’ve handled expenses. Flip the system on its head. Set aside savings – whether by debiting X amount from your salary account to your savings account by debit, or by auto-debit in a monthly scheme (after talking to your accountant) – the moment you get paid. This way, you will save money while it is still in your hands, instead of trying to save at the end of the month. Personally, I deposit Rs 5,000 in a PPF account and put away Rs 10,000 in a savings scheme in the first week of every month.

Go online to find and compare the best budget apps that can help you track your savings and keep you motivated to stay the course every month.

#3 Invest in a bunch of high performing stocks.

Equity schemes show faster growth than debt funds, but they also have higher risk – so you should stay invested longer to even out the risk. Myriad stock options and funds in the market can help you with your short- and long-term goals, your risk appetite, your vision for your future and your current holdings. Sit down with a good money manager to take an impartial look at your finances today, and do necessary course correction every month till December 2024 to see some magic unfold. Understand the tax implications of each instrument before you invest.

You can log on to investment apps or budget apps that aggregate the best stocks for the week and put in your money as per their recommendation.

#4) Curb all unnecessary expenses – NOW.

I don’t mean you should never step out for a meal or stamp out the desire to shop online once in a while. But are you spending on things you don’t need, as opposed to things you might? Here’s how you divide your expense chart, in 3 categories:

Want Need Love

Of these, save towards ‘Love’, which is most likely a splurge buy, and spend on ‘Need’. You might not really need or love the products that fall under ‘Want’. Take your pick accordingly.

Do you have any smart money manager tips to share? Let us know in the comments below.

(Picture courtesy https://www.thebalancemoney.com/save-money-every-day-453945)

5 ways to teach your children about money

It’s never too soon to teach your child the value of money and how to spend money responsibly. Here’s how.

by The Editors | editor@themetrognome.in

Kids these days are so attuned to what’s happening in the outside world, they will quickly demand some new product they see on TV, or ask for money to eat the new pizza advertised in the papers. As indulgent parents, we go along with most of our kids’ demands, but stop to ask yourself this: are you harming your child by indulging his every demand?

Instead, why not teach your child the value of proper spending? By giving them whatever they ask for, children do not learn to value money or the effort it takes you to earn it. Unless they learn these lessons, they will grow up fiscally irresponsible and suffer from reckless spending habits.

That is not to say that you clamp down on your child’s every demand and keep preaching about money to him – doing this will instil a negative connotation in the child’s mind, that money is the most important thing to possess. Here’s what you can do:

1. Be a responsible spender yourself. You have no right to preach to your child if you are a reckless spender. Nor can you tell your child to share his possessions or pocket money with a sibling or close friend if you don’t know how to share. Take the middle ground, instead. Cut the temptation to buy everything in sight when you go shopping, and make sure your child sees you shopping for household groceries and paying the household bills before making personal purchases. Let your child see you compare the labels on products and explain why you chose one product over another. This will get the child thinking that shopping must be done thoughtfully and not recklessly.

2. Ask your child to help you balance the books. Children enjoy being treated like grown-ups. The next time you list the monthly expenses in your budget book, invite your child to help you calculate the numbers with a calculator. Your child will be happy to be trusted with the calculation process, and will also learn to see numbers in a new light. Discuss simply where you overshot your expenses and where you saved up. Your child will immediately get an idea about the household budget and if you are in a position to buy him or her something new.

3. Take your child into confidence. Too often, parents make the mistake of shielding their children from their financial troubles. They are doing so with the intention of not scaring their children and making them insecure. However, if you don’t reveal to your child that your current financial situation is slightly worrisome, he or she will have no clue why you are not increasing their pocket money despite repeated requests, or avoiding giving them money for a new mobile phone. Sit your child down and explain that you are currently facing a slight crunch. Don’t burden them with too many scary details but let them know that you are trying your best to tide over the problem. A sensitive child will even offer to help by breaking his piggy bank for you.

4. Insist that your child save pocket money every month. Give your child a weekly or monthly allowance, and tell him or her that no extra money will be given in that time period under any circumstances. This automatically prompts your child to watch how he spends his money. Also inculcate the habit of saving a part of his pocket money every month. When he or she has saved a sizeable amount, give him a small treat. If he or she has been saving up to buy something, add the equivalent amount that he has saved to encourage him further.

5. Let your child earn privileges. The one thing we must take away from Western parenting is the manner in which parents in the US and UK make their children earn their pocket money by taking up small jobs. We must follow a model where if a child wants to treat his friends on his birthday, you can give him a job to do around the house and pay him per completed task. This teaches the child to help around the house. Also, encourage older children to put their talents to use to earn money – they could give tuitions to younger children, or take art and hobby classes. Let them keep the money they make, but occasionally ask them to go out and buy vegetables or a few groceries without giving them the cash for it. This will inculcate the habit to contribute to the household expenses without being selfish.

What are the ways in which you teach your child about money? Tell us in the comments section below.

(Pictures courtesy micheleborba.com, www.speakingtree.in. Images are used for representational purpose only)