Me: Salman Khan is going to jail for five years. His career is over. *Sad*
He: He has made a lot of money already. He doesn’t need more.
Me: What if he’s like me who never saved until a few days back and needs to make money and save it now?
That, my friend, is what the people with financial struggles think about. You work so hard all day long, miss the best outings, do something you don’t enjoy doing anymore, for what? To make money? What happens if even after making all this money, you have nothing in your pocket in times of need? It sucks.
Unfortunately, I have been in such situations more than once which made me realise the need of financial planning, even at my age. However, that didn’t work. Things don’t work for me that easily. I had to learn some habits, they’re still not habits yet , to get my financial game on point.
I started doing just a few things that helped me improve my financial situation. What?
5 Things That Helped Me Improve My Financial Situation
Watching The Financial Diet
You need to know about personal finance, if you want to do something about it. You need a mentor. You need to know about it from someone who really knows. I was lucky to discover The Financial Diet, one of my must-watch YouTube channels for self improvement.
From their videos, I learned how to save money, how to spend less, how to plan my investments, what my future investments should look like and so much more. They got me started.
2. Having An Expense Sheet
I am old-school person. I can’t have those fancy apps in my phones to track my money. But I had to track my money. It happened when my CA, Simardeep, was shocked at my savings at the end of last financial year. “You’re not saving any money, not saving on taxes. Where are you spending all this money?” Yes, I definitely earned much more than I should have been spending. Where was all my money going?
To get myself aware, I started recording all my transactions on an excel sheet. I believe putting them manually did something to my mind. You see, I never felt so bad when I swiped my card and bought something. But when I started putting those numbers down every day, I got aware. I got aware of my finances.
It not only helped me manage my money better but also helped me save money.
3. Prioritising Investing Money
Most of us look for saving money, eventually losing money in the long run due to this methodology. I couldn’t save money. So, I started investing. It helped me with my spending issues. I was spending money in a way, buying things, stocks and mutual funds, but this time, I was growing this money.
I began small. I started with one mutual fund and an SIP plan – a systematic Investment plan. Every month, a certain amount is deducted automatically from my account right when I get the major chunk of my income. So, nobody touches that money as it’s locked for five years.
Gradually, I started investing in stocks. While I am still not trading in stocks in large numbers, I want to grow my money so I play safe, I still have some money put in there which I am growing gradually.
4. Making My Emergency Fund My Life Goal
I am serious, although I did it for only three months. But do you know I saved more money in these three months than I did in last two years? How did I make it happen?
Backstory – I am a person who gets pissed off easily. If I don’t like who I am working with, I want to leave. Now. But, I don’t want to part with my sweet money until and unless I have another opportunity that would bring me same amount of money I am looking at losing, from that project. This was a PROBLEM. I felt stuck. I couldn’t leave. I needed the money. I need to pay my monthly bills
Then, I found out about emergency fund – a chunk of money you keep just for such situations. I knew I needed it.
For three months, I focused on just that and saved so much more.
5. Making shopping tough
I make it tough for me. How? Well, the small city I live in, runs on cash. I used to run on cards. Automatically, my laziness stops me from going to an ATM to withdraw cash that often which keeps my shopping in check.
Moreover, I move money in different bank accounts. So, my account with the ATM card almost always have pennies or bare minimum to survive that month. Other money is either locked or requires too much effort to take out. Hence, I have no choice but to spend wisely and miserly.
That’s all it takes to improve your financial situation. Self control or forced self control and proper channels of saving money, the right kind of motivation and the right kind of advice.
What about you? How was the last financial year for you? Did you save a lot of money? Did you invest money? How did it go?