Check the everyday flows and make the most of your money

Many a time,it is seen that people give importance to earning more money or on investing money in various investment avenues

Written by Adhil Shetty | Published: April 1, 2013 9:58:10 pm

Many a time,it is seen that people give importance to earning more money or on investing money in various investment avenues. It is often misunderstood by many that earning and investing are alone sufficient to be wealthy. Equally important is to make the most of the money you already have. Here’s how you can do that.

Credit card The increasing use of plastic money has led to the boom of credit and debit card industry in our country. While debit cards keep an automatic check on your spending due to the instant debit from your account,credit cards are more dangerous. If not used properly,your credit card can upset your financial position greatly. When Raj used his credit card to purchase his mobile phone worth Rs 25,000 he did not think it would become a big problem to his finances. When he received the bill the following month,the credit card outstanding was Rs 25,000,but the minimum amount due was Rs 200. Raj was elated that he had to pay only Rs 200 at present,and thought he would pay the remaining amount later. What Raj didn’t know was that he had to pay a huge interest on the difference amount at the rate of 3 per cent per month. This cycle continues and soon Raj will realise that the outstanding amount is almost 3 or 4 times his original spend. A credit card is fine as long as you pay the full amount always on time.

Avoid penalties A penny saved is a penny earned. But most of us tend to ignore this. Penalties are levied by service providers if you do not pay your bills on time. It is but common for us to forget paying our dues on time. It is advisable to keep reminders to pay bills on time. Using the Electronic Clearing Service (ECS) or the auto-debit mode from your bank account to billers will make life easy when you pay your utility bills. This has two benefits – one is you will avoid paying penalties,which means you save on this amount. The other benefit is that some service providers offer you discounts when you opt for ECS payments and pay your bills on time. This also means you save money.

No idle money Rakesh had his salary account with ICICI Bank,which offered him 4 per cent pa interest. This amount if invested in a fixed deposit earning 8 per cent interest per annum could have given Rakesh Rs 24,000 as interest in a year. Alternately,this amount can also be invested in a liquid plus mutual fund,if liquidity is of importance. However,Rakesh’s negligence has cost him dearly.

If you are a busy individual with no time to track your money,the least that can be done is to opt for a sweep facility in your savings account,where any excess over a stipulated minimum amount is automatically transferred to a fixed deposit account earning higher interest.

Track your expenses Although this may not seem to have a connection with increasing your money,tracking your expenses over a long period of time helps you cut out unnecessary expenses and bring about a discipline in your spending. You will be able to find out the heads where you spend the most,thus forcing you to think how to cut down expenses.

When you follow basic tips to make the most of the money you have,you will be reaping the twin benefits of both saving money as well as gaining the maximum benefit from it. These simple but effective ways help you make the most of your money,thus indirectly helping you in increasing savings.

—Author is CEO of

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