Earning enough money is one thing. Handling your finances prudently is another. In today’s world, living a humble lifestyle is considerably difficult for many. Easy access to frivolous expenses might be spoiling your spending habits. Today we make it easy for you to understand if you are good at managing your money. Here are 5 signs noted by Quantum Mutual Fund that will make it clear if you are on the right track while taking care of your finances.
Steady flow of income:
If you have a steady flow of income and you know how much you earn means you are good with your money. This will help set the right expectations at first. Living within your means is a critical part of money management and growing your wealth.
Adopt prudent Asset Allocation:
A simple and effective asset allocation strategy can make investing easy. If you are diversifying across asset classes to mitigate risk in your portfolio, you are on a right track. It allows you to invest across asset classes of equity, debt, and gold. With this 12-20-80 asset allocation strategy, you will invest at least 12 months' worth of your monthly expenses in a liquid fund that prioritizes safety and liquidity over returns, 20% of your overall investment corpus in Gold, and stagger the rest 80% of your investment in equity funds.
Paying bills:
While this might be super obvious and a mandatory expense if you can pay all your bills regularly pat yourself on the back. This means you can afford housing, utilities, food, transportation, EMIs, and other important needs every month without going into debt.
Retirement planning:
Retirement planning should start ideally from your very first pay cheque. If you are considering retirement planning right from the beginning and setting a portion of your earnings towards your retirement fund you are good at managing your money.
No credit card debt:
Most of us carry credit cards. Is it a good thing or a bad is a debate forever. There are people who not just carry credit cards but also know how to make the most of it. If you have managed to stay away from credit card debt you are good at managing your money.
Being good with money will allow you to create wealth. If not, you now know what you need to be good with your hard-earned money. Make the most of your time and start following each point. These simple habits will help you achieve financial independence.
