Cut unnecessary Expenses

Although some expenses are unavoidable, cutting down expenses is saving in indirect manner. Avoid purchasing things you might not find relevant. Or, rather, purchase things that are most relevant as per your needs. The problem with most of us is that we never think this way when the money is available to spend.

Deferment of expenses

Some expenses can be deferred for the future. For example: your Air Conditioner might need servicing, you can defer the same to winter in case you have spending issues. You might want woodwork in the house, defer it if you are struggling to generate cash for the same. The other way is to save a small small amount for a particular purpose and utilize it later.

Privately generate funds

If the liability is not bigger and you are certain you can repay it afterwards it is better to search for avenues within family and friends. If they pay the sum it is nothing like it. You can repay later and in most cases you will be saved from personal loan interest or any sort of short term loan from the bank or financial institution.

Don't liquidate your long term investments

Until absolutely required, it is always advised that you don't liquidate your long term investments like fixed deposits, PPF, NSC or insurance premium. Liquidate these only when you have used all your cards. These investments are meant for long term and can bring decent returns to you, so ideally they should not be used to set off short term claims.

Monetize your gold holdings

This is a great scheme if launched by RBI that can be a savior for persons stuck with their finances. One will be able to deposit his gold holdings with the commercial banks for which they will get cash certificates. These certificates will carry a fixed interest that is given based on Gold holdings. It will induce additional source of income for cash appreciation.

Disciplined approach should be followed in dealing with finances. Instinctive rush to purchase something or to spend heavily on unnecessary items will slash your money and you might face a crisis situation at the end of the month. Better to spend smartly and keep the savings habit intact.

About the Author:
Amit Sethi is an MBA (Fin) graduate and a Financial Consultant. He has spent over 10 years in Equity research, Stock broking and Financial Consultancy Sector. He can be reached at [email protected].

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