FINANCIAL PLANNING FOR A SPENDTHRIFT PERSON
·
Your spendthrift ways can be attributed to your
easy access to money that is not earmarked for a specific purpose.
·
To overcome your compulsion to spend, you need
to address both these issues.
·
Keeping all your money in the savings bank or
your salary account is not advisable.
·
The thought of sufficient money in the bank can
encourage unnecessary and irrational spending.
·
So, you must switch to a debit card linked to
your account and sign up for an SMS intimation of expense and account balance
when you use the card.
·
Each time you spend, the depleting balance will
act as a strong de-motivator.
·
The low interest rates that banks pay on
balances in savings accounts are also an important reason for not holding too
much money in such accounts.
·
Even if you have not decided on your future
plans, allowing money to lie unutilized will impact the efficiency with which
you create long-term wealth.
·
In the time that it takes you to plan your
goals, you must take some initial steps in this direction.
·
You should make an estimate of your monthly
expenses, including the money required for your entertainment and other
activities, as well as a margin for unexpected expenses.
·
The remaining funds should be invested
immediately.
·
You should identify a couple of diversified
equity mutual funds and start a systematic investment plan (SIP).
·
You can also sign up for the excess funds to be
automatically transferred to a bank fixed deposit, which will safeguard your
money as well as generate a higher interest income.
·
Once you decide on the goals for which you want
to save, you can assign the investments to them.
·
When you realise that the money has been
allocated and is not available to you, it will curb your spending.
·
Over time, the growing returns from your
investments will foster the saving habit.
https://iamrajen.blogspot.com
https://iamrajen.blogspot.com