Tips to stop losing money and make great investment/savings

Often we realise that in spite of taking all the care and avoiding big spending, at the end of the month, the bank balance gives you goose bumps. You keep on wondering as to where did you spend. But my dear no use crying and making a big hue and cry, follow some simple rules and stop losing your money and increase your savings slowly and steadily.

-Keep an account of your expenses
Keeping a track of your expenses is a difficult, boring and tedious job however it is a very effective way of controlling your expenditure. The best approach to tackle this problem is first of all make a list of all the necessary expenses which usually occur every month such as groceries, essential services bills such as water, electricity etc, transport expenditure, school fees, monthly rental etc. Add all these up and as soon as you get your salary put this amount in an envelope and keep it separately. Take another envelope and put an amount that you can classify as emergency expenses such as sudden birthday/anniversary gifts, emergency car repairs etc. Strictly try to spend only the amount in the envelopes and not a penny more. This will help you to keep tab on the amount of money you spend.

-Do not change your mobile phone and other electronic gadgets too frequently.
According the market survey there has been a marked increase in the young population for changing the ever expanding market of electronic gadgets among which the mobile phones is at the top of the list. Often people have a whole bunch of old and obsolete models of phones lying in their houses with no second hand value. According to Tech experts, in these times of electronic age, change your mobile once in two or three years, your laptop once in three years, and your television once in five years.

-Do not get tempted to sale promotions
Often you end up buying stuff that you do not need or you will never use in many of these sales propaganda by various companies and shops. Always think and decide whether you really need all these cosmetic stuff or this extra pair of jeans or sunglasses just because they are selling cheaper. It has been also observed that many of the products available during the sales are of inferior quality or many a times close to their expiry dates. So look carefully and then decide.

-Avoid buying stuff that serve the same purpose
The market is flooded with products that are now specialized in multi-tasking. Avoid buying an i pod if you already own an MP3. There is no need to buy an elaborate audio system, if you already have a desktop or a lap top at home. Instead buy an external speaker set and connect it to your computer and listen to the music using the CD/DVD player of the computer. If you have an access to internet, you can listen to various radio stations around the globe or download your favourite music and enjoy.

-Pay attention to your kitchen expenses
Often the grocery shopping in air conditioned stores and shops is not only expensive, the veggies and fruits are also not the freshest. To do more saving without compromising on quality, buy your stuff from the whole sale market or local market. Buy your dry rations on a monthly basis and veggies and fruits on a weekly basis.

-Visit your bank regularly and take advice from financial advisors and experts
The salary that you earn comes in your bank and often stays in your savings account at a very meagre interest. The financial experts advise that opt for flexi deposit schemes or have a sweep account. In this arrangement, your money remains in a fixed deposit which fetches you higher rate of interest as soon as it goes over a particular limit, say $ 1000. By earning higher interest at the year end all these extra bucks get added up and voila! You have decent amount in your kitty. Make it a point to visit your bank regularly and keep on inquiring about the various schemes offered by banks which will ensure great returns.

-Keep track of all your investments
Often people take stock of the investments when they file their income tax returns. Review your investments and check which fixed deposit has matured, which insurance policy has far exceeded your needs, the systematic investments plans that have not done too well, list of dividend cheques encashed. Check your insurance coverage. Make sure you are investing wisely in tax-saving schemes as they should not be above your needs putting an extra strain on your needs.

-Check your list of annual subscriptions

1) Evaluate whether you really go to the expensive gym whose annual subscription you have taken. Is it cost effective to have a tread mill installed at home? Do you really use the exercise bike that you have purchased. Go for cheaper options instead of yearly subscription opt for monthly subscription. Instead of investing in expensive exercise machines, walk to your work or just use the stairs instead of lift. Do exercise at home and eat a balanced diet. Do chores which require vigorous activity such as washing your car, pruning your garden, or cleaning your house, washing your clothes etc.

2) Check out how much you are spending on the annual subscription of your favourite magazine. Instead become a member of a neighbourhood library where you will have a wide range of books including your favourite magazines. Alternately you can hire a monthly magazine guy who can supply a fixed number of magazines at your door step. Make efforts to join a book club, it is a perfect place to not only socialize but also to discuss the latest books or your favourite author.

-Be vigilant and careful while using Credit/Debit cards
Plastic money in the form of credit card or debit card is very convenient but it is a perfect lure for you to overspend. 70% of the customers have acknowledged that they have over-spent while using their cards. Also never forget that if you exceed the credit –free period you end paying a hefty amount as interest which can be easily avoided if you are more careful while spending. Always make it a point to pay back before the due date.

How to invest wisely at the Stock Exchange

When investing in the Stock Market, an investor should:
-     Plan: Make a personal investment plan or policy.
-     Identify the purpose of investment: It is important to be clear whether you want to retire with a rich portfolio or you want to make a profit in a short time for some immediate monetary or short term monetary requirements.
-     Set goals and objectives: Be clear where do you want to invest? Is it more beneficial for you to make investment in a particular company for a longer period of time or would you take the risk of investing in companies that are bound to grow rapidly in a short time period.
-     Identify risks relevant to you and your portfolio- The rule of the game is -Higher the risk, higher the return. One should always remember that a highly profitable investment can sometimes backfire and one can end up with loss.
-     Set appropriate benchmarks to measure the success of your portfolio- Try to keep track of the profits of companies you have invested in. Also keep om comparing with companies in different sectors.
-     Asset allocation- Decide carefully as to how much percentage of your total portfolio will you allocate to the stock market? One should never put all the money in one mode of investment.
-     Diversification- Don’t place all your eggs in one basket. Allocate to different classes which will help to reduce the risk associated with your investments. However no investment is totally risk free.

Before starting to trade in a stock market, the investors should evaluate the following points:
a) Is this a good entry point?
b) Is this time appropriate to invest in this security?
c) Is the security fairly priced?
d) How much capital is at risk?
e) What’s the probability of earning a profit?