Plan and track to grow your money

The world is changing, and so is world of money. Finance and personal finance rank first and third, respectively, in the most searched keywords by Indian netizens.

Statistics show that most people could manage very well on the income they have if they are able to keep their bills and expenses within the income. Sadly, too many people do not understand how to do this.

Simply having a budget in place or keeping up with your checking account isn't enough anymore. Our research shows that a person earning Rs 1 lakh per month has 50–100 financial transactions across all instruments each month. It's difficult to track these spends and get a clear picture of where your money is going.

Goal-setting

How many times have you made a New Year's resolution to stay within your financial budget? Started out with gusto on January 1 and lost steam by January 31?

An important aspect of financial planning is setting limits or thresholds for your spends at the beginning of the month and tracking it against your actual expenses.

Goal setting is a great planning tool that brings in discipline and rigour to your financial management. Try classifying goals as either wants or needs.

Go a step further and add long-term or short-term to the description. For instance, say you want to buy a new car soon. Gathering the money for a down payment without borrowing or dipping into savings would be a short-term need; call it priority number one. Longer-term needs, such as contributions to a retirement fund, can get priority two.

Choose goals you can get excited about. Do you need to save for your dream car or that house you've been wanting for years? To motivate yourself to spend less, always visualise your future with your dreams coming true.

It is important you know where your money's going so you know where you can save. Make a budget that will meet your financial duties. If you have to cut down on certain expenses to live within your budget, then do so. Spend money that has been set aside for a particular expense only for that purpose.

We all know what it is like to have our money dribbling away one coin or one note at a time. It can be very helpful to record all expenditure for a set period of time.Once you know where your money is going, you can curtail unnecessary expenses.

While the easiest way to manage money is to put a piece of paper in your wallet or check book and check what happens with every rupee you spend. But practically does this really work? And, what if you have accounts across multiple banks? How do you remember your transactions ?

In such a situation, the best tool one can the one that organizes your financial information by bringing your accounts together in one place – including banking, credit card, loan and investing accounts. And lets you check in anytime to see exactly where your personal finances are for the week, month or year.

Mobile phones are almost life savers today. Try and setup bill reminders to not miss payment dates and input expenses on your phone's calendar. So when you sit down during the weekend with your accounts, you know exactly where you spent during your last outing.

If you break down your personal finances, they are less overwhelming. And you have learnt that you can keep them organised if you take a few minutes each day. A predictable financial future will leave you with more money in your pockets.