In today’s fast-paced world, managing money effectively cannot be overstated. This involves balancing spending, saving, and investing to secure financial well-being.
Earning money is not enough; it should be spent regularly, and investments should be made for future needs, following certain principles to ensure adequate assurance.
30 Percent Rule: Never use more than 30 percent of your credit card limit. For instance, if your card has a limit of Rs. 1,00,000, avoid spending more than Rs. 30,000 monthly. If you exceed this limit, try to pay the excess amount in the middle of the month.
70 Percent Rule: The 70 Percent Rule is a key to a comfortable retirement. Plan to live off at least 70 percent of your current income after retirement. For example, if your monthly salary is Rs. 1,00,000, aim for an income of Rs. 70,000 after retirement to maintain your current lifestyle.
10-15 Percent Rule: The 10-15 Percent Rule is your safety net for future needs. Allocate 10-15 percent of your income for future needs. So, if your monthly income is Rs. 80,000, consider investing at least Rs. 12,000.
Rule 115: Use the rule 115 to calculate how long it will take to triple your income. Divide 115 by the return on investments to determine how many years your money will take to triple. For example, investing Rs. 1 lakh at 8 percent interest will take approximately 14 years to grow to Rs. 3 lakhs.
Not More than 10 Percent: Ensure that not more than 10 percent of your total investment is in a single share or fund. For instance, if your investment is Rs. 10 lakhs, maintain a portfolio of Rs. 1 lakh in a single share or fund.
24-Hour Rule: Wait at least 24 hours before making a purchase. This time allows you to decide whether the item is genuinely needed and helps control unnecessary costs.