The story of ten, five and one talent in the Bible, gives the general outlook of people about investing. Investing is a tricky issue; that needs skill, intelligence and risk taking. The anticipation of the trend or better-called guesstimate in the financial circle more often turns out to be a sort of gambling. The art of spending is as important as earning money! Both should have a capital attachment called judicial.
The ants keep some reserve for the rainy days. We too do same wealth reserve for the rainy and old age. The instruments and tools meant for this safeguard vary from person to person. Correct usage is what the financial wizards advise the clients to adapt.
Financial planning and mathematical modeling allow individuals to plan and adjust financial management more accurately. In every case, efficiency, time frame, and need assessment are critical as well essential. The right Return on Investment (ROI) is no longer a jargon but a reality. The spending pattern is equally important- cash, check, credit card, debit card, wallet, equated monthly installment (EMI), premium, etc.
The ease and comfort of money handling are typically making a realistic budget with provisions for contingencies. Thus, the situation of ‘never without money’ can be attained, that does not mean, a shoestring budget is a solution. Of course, there are few factors beyond human control like natural disasters. The expenses in a budget can be classified as capital, recurring, anticipated, regular, cash flow, discretionary, medical as well as the one that can be postponed. Proper budget is typically the control gear of finance.
No two situations are exactly similar in a budget of different families. Variables and dynamic nature of expenses make copycat situations redundant. The motto of investing and saving can, thus, summarize as ‘save enough for life’s goals’ with a proper budget.
Customization of spending categories and patterns based on experience will pave the way for well-defined financial objectives, short-term as well as long-term. Seeking advice from a Certified Financial wizard is the best way forward. Expenses can be regular as well as recurring, unpredictable or unavoidable. There is no loss in opting for a New Year discount, introductory offers, Black Friday sale or for that matter even a bulk discount if that can mend a hole in the purse. The interest of much publicized zero interest may be with a string attached.
The landed cost is to be clear as the hidden costs are usually high. To extract the best out of the off the cuff reserve, putting all the negotiation skills can be deployed. Online travel booking will be ideal with a slight change of date, most of the time. The cost benefits ratio concept should be of prime criteria in budgeting.
Proper discretion should be in investing in mutual funds, venture capitals, stocks and real estate preferably with the advice from financial experts. A thumb rule in investment can be curbing expenses within one-third of net income. However, there is nothing more concrete than using common sense exists when it comes to investing.