IndiaP2P Blog
Responsible content on personal finance & economics that makes you smarter about money.
What is a budget & how do you stick to one?
Mar-29-2022
"You must gain control of your money, OR, Lack of it will forever control you." -Dave Ramsey
What exactly is a budget, and why do you need one?
For most of us in wealth-building phase, needs outweigh income. A budget enables us to manage unwanted wants by avoiding, delaying or replacing them. It also helps divide available resources towards essential needs and life goals. For fortunate others, budget helps in directing surplus towards priority investments. Whichever life stage you are in, a budget is a necessary tool for managing and monitoring your income, expense, and investments.
Few tips on creating and sticking to your budget.
Wait before buying – An impulsive buy occurs when you buy something you didn't intend to get. Sometimes we buy things because they are on sale, or we are emotional, or we have recently received a bonus. I'm sure we've all bought things on sale that we never used. We can avoid such purchases if we wait a day before acting on it.
Calculate cost per use – Purchasing the least expensive solutions is not always the greatest approach to save money. It is preferable to make purchasing decisions based on effective cost per usage.
Example – Fast fashion clothing bought at a discount store that lasts 20 wears may end up costing more in the long run than purchasing high-quality clothing that will last 100 or more wears.
Rent vs buying – The cost of each use decision technique is also used to determine whether to rent or own an item. Consider buying or renting a car as an example – the expense of operating and maintaining a car can be too expensive when compared to hiring Ola/Uber on a regular basis if you use the car infrequently. Aside from obvious operating costs, there are hidden and important expenditures such as interest and depreciation in the car's value that are typically overlooked when making a decision. Typically, hiring Ola/Uber is less expensive for those who drive less than 1000 kilometres per month.
Automate your savings
Automating them is a simple method to save money. Various investment products, such as recurring deposits, systematic investment plans, provident fund contributions from salary, and so on, can be used to automate savings. By turning your savings into investments, you can avoid the temptation to spend unutilized funds in your bank account, making the savings sustainable over long term.
Grow your savings – Grow your savings by investing in suitable asset class based on your risk and liquidity requirements. Always select an asset class that has the potential to outperform inflation (after taxes). Once you've found a good asset class, stick with it and reap the rewards of compounding.
Author: Neha Juneja
Other Blogs
Is P2P lending safe in india?
Mar-24-2023
1.png)
What is P2P lending? Peer-to-peer (P2P) lending has emerged as a viable alternative to traditional banking services in India. This financial model enables borrowers and lenders to connect with each other directly, without the intervention of a financial institution. P2P lending platforms offer investors higher returns than traditional investments, such as fixed deposits, while also providing borrowers with flexible repayment terms and lower interest rates. However, like any other investment, P2P lending comes with risks that investors must be aware of to protect their investments. Top risks associated with P2P lending in India are as follows: Platform Risk: The platform risk is the risk of the P2P lending platform defaulting, either due to a shutdown or bankruptcy. This risk can result in investors losing their investments. To protect oneself from platform risk, it is crucial to choose a reputable P2P lending platform with a good track record. Credit Risk: Credit risk is the...
Making Wise Investment Decisions in India: CAPEX vs OPEX
Mar-20-2023
Making Wise Investment Decisions in India: CAPEX vs OPEX When it comes to making investments in India, the decision you make between Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) can have a huge impact on your returns. Knowing the difference between these two investment strategies and how they are used is essential for anyone looking to make smart decisions about investing their hard-earned money. Let’s take a closer look at CAPEX vs OPEX in India and explore which option may be best for your unique needs. What Is CAPEX? CAPEX is an investment that involves long-term purchases made by businesses or investors. These purchases are typically large assets such as real estate or equipment, which must be paid off over time. In addition to purchasing the asset upfront, there are often additional costs associated with CAPEX investments such as maintenance fees, insurance costs, and taxes. What Is OPEX? OPEX is an investment strategy that involves...
Maximizing Your Savings: The Ultimate Guide for Salaried Individuals in 2023
Mar-10-2023
2.png)
Maximizing Your Savings: The Ultimate Guide for Salaried Individuals in 2023 Are you tired of living paycheck to paycheck? Do you wish you had more savings in the bank but don't know where to start? Look no further! The Ultimate Guide for Salaried Individuals in 2023 is here to help. In this comprehensive and easy-to-follow guide, we will show you how to maximize your savings and take control of your finances. From budgeting tips to investment strategies, we'll cover everything you need to know about saving money in today's economy. Let's dive in and start building your financial future today! Introduction to Personal Finances There is no one-size-fits-all answer when it comes to maximizing your savings as a salaried individual. However, there are certain best practices that can help you make the most of your hard-earned money. One of the key things to remember is to start saving early. The sooner you begin setting aside money, the more time it has to grow through compound...
News & Announcements
Have more questions? Click here to schedule a quick call with our investments team
CHAT WITH US
