The world is changing rapidly. More and more people are aspiring to live a certain lifestyle where they can use their income sources to satisfy their needs. With over 808 million people under the age of 35, India has the largest young population in the world. With so many young people in the workforce earning a substantial income, businesses are also shifting their focus to cater to the needs of this demographic.
Most professionals in India work 5 to 6 days a week and 8 to 9 hours a day. Though they are earning handsome salaries, many struggle to maintain the right balance between their personal and professional lives. Many working professionals do not get enough time to do everyday household chores such as cleaning, paying the bills, grocery shopping, etc.
On top of that, the expenses also keep piling up as they climb the social ladder and embrace a better lifestyle. If you are struggling to manage your salary, despite working a full-time job, you need to make certain changes in your lifestyle so that you can effectively fulfil your needs, save for the future and invest in assets. To help you do that, here are six effective tips for smartly managing your salary.
1. Get a clear idea about your expenses
When they progress in professional life, people tend to upgrade their lifestyle with it. This changing lifestyle often puts additional pressure on their income as expenses pile up. Once you get a salary hike, you are tempted to shift from a bike to a car and move to a bigger apartment. You also start to go for vacations, and maybe an international trip once in a while.
With increasing disposable income, people have started to spend more on various things. The increased expenses incurred through rent, dining out in restaurants, entertainment subscriptions, online shopping, and investment. These expenses can get out of control if not managed properly, leading to more financial stress.
Therefore it is essential to manage your expenses. One helpful way to do that is by listing your daily, monthly and yearly expenses. That way, you have a clear idea of what amount of money you need to pay for these expenses. That way, you can make the change in your lifestyle and allocate more money for saving and investing.
2. Look for avenues to save money
One of the major problems with disposable income is that people start to spend on things they may not need. It includes dining out more often, planning more vacations, shopping, and many more things. In all this spending, they forget that there are ways to save money even when you are spending. An effective way to save money on expenses is to look out for discount deals.
Many companies offer discount deals to new and regular customers, which can slash the final bill amount to a great extent. For example, You can save a lot of money when buying groceries.
You may not get any discounts on your purchases if you buy your groceries from local stores or supermarkets. You also spend money on fuel or cab fares to commute to and from the supermarket. On the other hand, you can save plenty of money if you switch to online grocery shopping.
Online grocery shopping brands offer various discount offers on your purchases. You don’t even have to go to the supermarket. The groceries you purchase are delivered to your doorstep for free. No need to break your back carrying those heavy grocery bags. Such simple lifestyle changes can help you make significant effects on how you spend your salary.
3. Build a rainy day fund
Due to rising inflation and price, it can be challenging to manage your income and lifestyle. If you don’t have the habit of saving and investing money, you are more likely to face a difficult time during an emergency. Emergencies can arrive at any time. You might fall sick, meet with an accident, or want to pay off your credit card bill urgently.
It can be challenging to pay for them if you don’t have any money for such situations. Therefore it is essential to put some money aside for emergencies. These funds are called rainy days. The rainy day funds can also help you deal with financial inconsistencies such as losing a job, putting a down payment for a new house or car or paying your medical bills. Try to put some money aside every month from your monthly salary so you don’t have to gather larger sums at once.
4. Get healthy insurance at the earliest
The changing times bring a lot of uncertainties as well. Therefore you need health insurance to cover your medical expenses if you fall sick or undergo a medical surgery. Health insurance helps to reduce the pressure of medical expenses by covering major payments like medicines, hospital bills, and health checkups.
Some health insurance companies also offer free regular health checkups and tests under the insurance. That way, you can save money on tests and checkups.
It also helps to get health insurance when you are young and healthy. When you are older, you are more likely to face health problems, making it difficult to get affordable health insurance. You will need to pay higher premiums for your health insurance when you’re older. Therefore it is advisable to get health insurance at the earliest.
5. Embrace good financial habits
Your current financial situation is the result of your financial habits. That way, you spend and manage your money daily, determining your financial situation. Thankfully embracing good financial habits can help you improve your financial condition. It’s to have a clear distinction between your needs and wants.
Your rent, groceries, insurances and mortgages are your needs, while your shopping, vacations, etc., are your wants. Making this distinction can help you avoid making unnecessary expenses. It’s also good to save money and invest it to generate more money. Whenever you have extra money, try to save it or invest in various assets like mutual funds and monthly SIPs to increase your income.
Managing your salary doesn’t have to be a headache, especially when there are many resources to gain financial knowledge and improve your finances. Remember to leverage the discounts while shopping for groceries online or making other online and offline purchases to save money. The above tips will help you manage your salary and spend it wisely.
Also read: 9 Common Excuses for Not Having a Personal Budget & How to Beat Them
