Z stands for ‘Zero’ and since it is the last day of the month, this is the figure many of my salaried friends see when they check their bank accounts. this is a sad reality for many of my salaried friends. It often happens for them that the last 5-7 days of the month are spent waiting for the next month’s salary. Besides the regular living expenses, the majority of the balance gets drained in the monthly instalments and credit card debts. Due to easier access to credit, overspending beyond the means is the general tendency. Not only does this habit affects your current living but also leaves too less for you to save. Here are few tips to a healthy financial future:

1. It’s all about Managing the Money

In today’s world, many people know how to earn well, but seldom do they have an idea of how to manage it well. Knowing where does the money come from and where it goes should be the money mantra for life.

2. Invest in the Suitable Instruments

Once one learns the art of managing and saving the money, it must also ensure that the savings are invested in suitable instruments matching the investment tenure and risk appetite of the person. Risk and rewards are generally inversely proportional to each other. So, if you are investing for a longer tenure, invest in risky equity markets which happen to be lesser volatile in long term but provide better returns. Further, if you are investing with a one-year horizon, better to go for debt investments like FDs etc., since they provide safety of the principal invested but come with reasonable returns only.

3. Create Assets, not Liabilities

It is often said that that the wealthy talk about their assets, while others focus on their incomes. Spend your money towards something that creates assets for you and further, take a step forward to not put all your eggs in one basket. Not only does a diversified portfolio manage the risks better but also ensures additional incomes through the assets one has invested in. Enjoy this additional incomes for the items in your wishlist.

So, take a step forward from having zero to being a hero in managing your money.

Check out the A2Z of Personal Finance here.