7 Secrets to Avoid Getting Broke Revealed!

Updated on: 22 Dec 2023 // 5 min read // #mmm news
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MONEY is an extremely important need for every person. Every individual needs money to meet his basic needs including – food, shelter, and clothes. However, nowadays money is not just important for human survival on planet earth, but to create a status for himself/ herself. People buy cars not just for conveyance, but also to impress their neighbors and peers. We spend money on not just homemade food, but also on partying at the expensive restaurants. The more money you have, the more important you feel. However, in order to create an impression on others about our financial status, most of us often forget that the lack of money can affect us drastically.

Many people don’t pay attention to the need for effective financial management. You give your sweat and blood to earn money, it is important to give it the due respect and not spend it carelessly, else sooner or later you will be broke.

Do you wish to live your life to the fullest without worrying about your financial security? If yes, here are seven secrets to avoid getting broke and managing your finances smartly:

1. Set Goals

Setting goals help us move forward in life. For managing your finances perfectly, it is important to be specific about your goals and make a plan on how you will achieve those goals. It’s important to separate your needs from wants, and comfort from luxury.

For example, buying a house is always more important than buying a luxury car, planning for saving for investment is more important than going on a vacation. Once, you have fulfilled your needs, you can spend on wants.

When you have identified all your life goals, prioritize them as per your needs. You could set short-term goals to make them more feasible and achievable.

2. Start Making Investments

When you know your goals and priorities, start making investments to achieve them. For instance, if you want to buy a house, you need to start saving early to reduce your burden. If you are spending a huge amount as rent each month, it’s better to avail Home Loan and purchase your own house and pay EMIs instead. You can even book your house under Pradhan Mantri Awas Yojana (PMAY) scheme to avail a subsidy amount of upto 2.67 Lakhs (subject to scheme terms and conditions).

To know more, read Have You Booked Your Home Under Pradhan Mantri Awas Yojana Yet?

To reduce your Home Loan burden further and to arrange for cash down payment, you can start saving by investing in fixed deposit, recurring deposits, retirement plan, mutual funds, and other options. Some schemes can also get you a tax rebate. So choose your investment plan wisely for maximum benefits.

For lowest interest rates Home Loan, you can visit mymoneymantra, a leading online lending marketplace, or talk to our Mortage Specialists.

Also Read: How to Buy a House without Having Money for Down Payment?

3. Be Prepared for Uncertain Events

What if you lose your job without any prior notice? What if you fall sick all of a sudden? How will you afford hospital bills that are soaring every day? Who will take care of your family if you leave this world all of a sudden?

Financial crunches can hit anyone at any point in life. It’s better to be prepared in advance for those blue days. Make sure you have emergency funds in place for such uncertainties. Also, start investing in Health Insurance and Life Insurance policies for a safe present and a secure future for yourself and your loved ones.

4. Manage Your Expenses Wisely

Money management is vital to avoid financial downfalls in your life. Prioritize your expenses as per their importance. Never delay your utility, Credit Card, and other bill payments. Ding this can reflect negatively on your credit report and lower down your credit score.

Plastic cards can be very useful in your day to day life. It gives you privilege to spend now and pay later as per your credit limit. However, if you don’t keep a tab on your Credit Card expenses, you will soon fall into a debt trap.

Never exhaust your savings on something unimportant, and have enough money to survive comfortably for at least a few months in case you lose your or job or for other uncertainties.

5. Stop Competing with Others Financially

Don’t spend beyond your means and budget just to keep up with your peers or to show others that you’re wealthy and can afford a luxurious lifestyle. It will impact your financial future only. Stop competing and equating yourself with others and choose a lifestyle that you can afford. It’s ok if you don’t follow every trend you read in the magazines or see on TV. Choose quality products over luxury and fashionable products. Be true to yourself and to your finances.

6. Optimize Your Interest Cost on Loans

If you have taken any Personal Loan, Student Loan, Home Loan or any other debt, think of the ways to pay them off faster. If you can afford, pay higher EMIs to keep the loan term short. You can opt for loan foreclosure if it doesn’t involve any additional charges.

Also, keep a tab on changing interest rates in the financial market, and opt for a balance transfer (if your loan agreement allows). Home Loan balance transfer can help you make a significant saving, thus, reducing your debt burden. It is always relieving to get debt-free sooner.

7. Stay Cautious When Lending to Others, or Being a Loan Guarantor

It is difficult to say “NO” when your loved ones in need ask you for financial help. However, help others only when you can afford. If your financial standing doesn’t allow you to do so, don’t do it. Explain your problems to the person asking for help. You shouldn’t be lending funds to others if you can’t even afford to pay for your own bills.

If your friend or relative asks you to sign up as a loan guarantor, read here: Stop! Read This Before Signing Up as a Home Loan Guarantor

These tips can prevent you from falling into a debt trap and depleting your finances.

If you are looking for affordable Credit Cards, Personal Loan, or any other financial products, visit mymoneymantra to apply online or talk to our Financial Experts. Call us toll-free at 18001034004.