Managing your Finances article series: Part 3: Staying on the track.
You have started the journey and you are on your way, you had a great start now what?
In this article, I will try to share some tips that will help you keep going on with the journey without getting side-tracked or losing focus.
Automate your investments.
You found the tools, you have done some great research and you have found the right funds/stocks or anything that are safe and they provide you great returns. Till now, you have been managing those manually but now is the time to put your investments on auto-pilot.
Pick the best Index Funds that you can trust for long-term benefits and start SIPs on those where the specified amount will be auto-debited from your bank account and will get invested into the picked funds, same can be done for stocks, FDs, or other tools too.
Why do this?
- The first benefit of this step is that you don’t have to manage the investments manually, saving you some time.
- It adds discipline to your investments because if you have money in your bank account you may make some impulse buying but if you have SIPs set up, it will trick your mind into an obligation of staying within the spending limits.
The automation can be done with the bill payments and other unavoidable expenses too to avoid late fees or other charges.
This step is already covered but still I would want to add to it. Impulse control refers to impulse buying of some shady stock because your friend said it’s gonna shot up or selling some strong stocks because some random person gave you fake news about it. Do your own research before making such impulse decisions.
Impulse decisions are not only related to stocks or Funds but also related to investment aids, try to do your own research and find people who can help and guide you before making any financial decision.
Tracking the investments.
Your investments are on auto-pilot, and expenses are under control but still it’s not the time to relax and keep track of your investments, you can do this once a week, you may check the working and returns based on which you might want to tweak the investment strategy.
Apart from that, keep an eye on the news about the companies and the industries of the companies you invested in in the long term. Look for the smoke before it turns into a fire burning your savings.
Set aside money for some enjoyment.
In the entire series, I’ve talked about saving, investing, tracking, and learning but you would want to enjoy your life too. The world is a beautiful place and you would want to explore it, travel to places, watch movies, and go on dinner dates you should earmark some money for such luxuries.
I know, you might think that this step will take you back from your goal but that’s not true, in fact, this step will keep you on track. Because when you are just saving and investing without using that money will create a sense of worthlessness and it will take you off track from all the discipline that you have maintained so to avoid that burnout, save money with the intention of spending on something that you would enjoy doing. It could be an annual subscription to any service you were thinking of buying, a family vacation, a new car, or a new mobile phone, it could be anything but please make sure that while making this decision make sure that you are using only the money earmarked for it and not from your other savings.
That’s all folks, I hope you enjoyed reading this article series, (Please give me some claps if you did) and as I mentioned in the introduction of this series, I do not have a finance background so if I made any mistakes or you think that any of the tips that I shared is irrational, then please add a comment, I would love to learn from your views.