The great thing about youth is the possibility of a brilliant future that awaits. Whether you agree or not, you have to admit at some level this is when you tend to take chances, look for chance and hope for something beyond the ordinary. However, without sounding condescending, youth these days also tend to be exuberant, especially in terms of money.
But like they say, if you haven’t lived it up, you haven’t lived at all. Weekend frolic, the movies, the occasional pub hopping and dinners with friends – seems like the life to live. Isn’t it?
Well, who hasn’t lived that life? As someone who’s just about starting out in the big corporate world, it isn’t unusual for us to spend on gadgets, fashion, shopping and what not. It isn’t until the end of the month that you realize that you probably went a bit overboard with your credit card spend.
When you look at your bills, you probably realize that maybe the expensive shoes you brought was really not necessary and instead of once again going to a fancy restaurant for a meal, you should have cooked it yourself.
Well, we are not here for the sermon. But here are some smart things that you can do to manage your debt.
Prioritize your spend:
Well, the point is not being a miser. The point is in exercising a bit of restraint. Let’s say you go out to the mall on weekends, there’s nothing that says that you shouldn’t fancy a nice meal. It just doesn’t have to be that fine dining restaurant always. The food court will do just fine too. If you need funds on priority instead of dipping into your savings you can apply for a personal loan. This way you will be able to make sure your financial nest is safe and you can use your personal loan on priority.
Save a bit more
This does sound clichéd but the reality is that saving money for a rainy day is as good as it can get. Great financial wizards say they save at least one-third of the money they make. Sounds like a good rule. What makes it work is also the fact that you have a sizeable chunk to spend. So, in other words, you needn’t feel guilty if some amount gets saved every month. If you really want to manage debt, try saving in small amounts. It needn’t come at the cost of joy.
Watch your Card spend
Oh for crying out loud! This is a generation of people who love flaunting their credit card. There are obvious benefits like a good CIBIL score getting built (assuming you pay your credit card bills on time) but the flip side is that you tend to over-spend than necessary. It’s basically the fact that you get to pay later; so it doesn’t pinch you right then. Remember, credit cards charge you a very high rate of interest. Most people keep servicing the interest (minimum payment amount per month) but what they don’t realize is that the interest paid is sometimes higher than the original amount that you swiped the card for.
It’s always advisable to clear your credit card’s outstanding amount. One of the most preferred ways to do this is by opting for a personal loan to manage debt. A personal loan comes at a much lower rate of interest and always gives you the flexibility to pay out through convenient EMIs. What’s more, when you apply for a personal loan with financial institutions like Tata Capital, and you can avail of rates as low as 11.49% and also enjoy quick disbursal.
And that’s not all, you may want to limit the spending power on your credit card so that you don’t get the temptation to keep going.
Invest in your future-Plan in advance
And now, for the most solid piece of advice. The best way to manage debt is to plan ahead in time. Let’s say you wish to take a vacation in 6 months. You can either start building up funds for it every month by cutting down your expenses and apportioning some money towards it or continue investing in mutual funds or fixed deposits so that your investment is kept separate from your expenses. A general thumb rule followed by successful money managers is to keep your investments going for a long-term rather than breaking it for a short-term need. After all, investments should be nurtured and tend to deliver good returns over a period of time. In such cases, a personal loan is a great way to manage your short-term money needs
Planning also means booking your travel tickets, stay in advance. The last-minute rush is great but it also burns a hole in your pocket. If you can plan a holiday in advance instead of taking an impromptu vacation, you can take a personal loan for travel that will cover your expenditure. This way you will not be surprised by any additional expenses.
You can manage your debt in some simple ways. All it takes is a bit of planning, and some thought as to how to spend your resources and you will realize that you can live the life you want and not fall into the debt trap.