Budgeting Archives - VSRK Capital

February 5, 2021August 19, 2023

5 Things You Should Know Before You Start Investing

Investment is not a one-step process but an entire series of steps taken to reach the financial goal. It encompasses making various financial decisions and finding the right investment alternative while minimizing any associated risks. Investing is affected by a large number of factors, so it is crucial to keep in mind some financial aspects. Today we will talk about five things you should consider before you leap.

Know Your Investment Goals
Every person who is desirous of investing should have a stated purpose of investment. It could be anything like buying a house, new car, child education and marriage or planning retirement. You should know what you want to save your money for and especially how much you want to save. Your investment goals are a crucial factor to decide the investment alternatives.

Know Your Financial Condition
Any investor, whether she is a billionaire or a new associate in a law firm, has some financial limitations. It is necessary to know how much would you be able to invest in the said period of investment. The purpose of investing funds would be to generate sufficient returns to help you achieve your financial goals, whatever they are. So, it is necessary to know how much investment you would be able to support and where you can cut corners.

Know the Importance of Emergency Funds
One of the main reasons why investments fail is that people consider their investment as emergency funds. However, this is never the case. For example, when you start a fund for buying a new house, then that money is being kept aside for buying that new house only. Now, what people do is that whenever they face any financial emergency, they break these funds, thereby hampering the investment cycle. Such acts lead to lower accumulated wealth. These emergencies, as the name suggests sprung anytime and you have no control over them. So, it is always advisable to consider an emergency fund. It would safeguard you in case of any mishap.

Know Your Asset Allocation
There are various investment avenues available in the market. You can invest in precious metals like gold & silver, stocks, bonds, mutual funds, real estate or a combination of all of the above. You may or may not want to invest in all of them. Each of them has its risks, rewards and characteristics. Therefore, you should be well aware of the investment avenues you have selected. Knowing each kind of investment avenue helps you to create a diversified portfolio and enhances your chances to reach your financial goals.

Know Your Risk Appetite
When someone wants to invest his money, there are majorly only two things in his mind. First is the reward and second is the associated risk of investment into that avenue. Every person has a different risk appetite depending upon his age, financial situation, priorities, etc. You should identify the level of risk you are willing to take to achieve your financial goals. This factor is one of the main aspects when you choose your investment avenues. People who have a high-risk appetite go for equity funds; they are risky but give good returns to its investors. Debt mutual funds are safer but provide low returns and are suitable for people with low-risk appetite. Hybrid mutual funds are known to yield better returns than debt funds and are less risky than equity funds, so they are suitable for moderate risk-takers.

November 16, 2020August 22, 2023

How Financially Compatible are You with Your Partner?

Marriage planning

India is surrounded by traditions and rituals. The marriage season never goes off. Talking about destination weddings or simple marriage ceremonies there is always a bar rising higher than before.

It is said that marriage is not just a relation between two partners but the entire two families. What’s the main point we look into the partner? Mainly emotional compatibility, secondly understanding. Two individuals are said to be perfectly compatible when they understand each other in every aspect. Apart from emotional compatibility, it’s the financial compatibility that is seen. Financial compatibility helps the partners to live an accomplished life. Many of you think that financial compatibility means both partners have equal money, but it’s not the case. It means what perspective both have towards money and what is the importance of money for them.

Know what money makes to your partner:

Different people have a different value for money. Before getting married, you should know what attitude your partner keeps towards money. Lack of communication can create a sense of misunderstanding between you and your partner. Planning a wedding is not as easy as it seems to be, we can say that it’s a step by step plan. These plans reduce the burden as a whole.

These steps involve-

Setting a budget
The theme of your functions
Preparing guest list
Choosing venue
Inviting the guest

And other small but essential things. Marriage is the most overwhelming activity for couples. The excitement and expectation are to the next level. Imagining a perfect wedding and making your imagination the reality needs a well-planned functioning.

Having a conversation around money with your partner:

When you both come to know each other’s views regarding money, make this topic a part of your regular conversation. The income and how you spend it and also how much you save and through what, these are some common talks that you may include in your common talking.

Setting a budget includes income ratio and expenditure ratio. Expenses are necessary plus luxury too. Also, your investments will have a glance in your budget. Checking up the bank accounts will help in dealing with various such heads. Deciding a day every month where bank accounts can be checked. This will help in planning a further budget and will rectify if any issue arises.

Arrive at a common goal:

While going your own way of managing money and bank balance, maybe one person is not satisfied with the way of other person management of money. Both have to discuss and mutually agree on common terms, spending, and saving. In case you cannot come to a common and stable decision you can consult a financial advisor. The financial advisor will tell you every detail regarding every possible term and this will then help you to come to a common decision.

Make the other person accountable:

When both of you, you and your partner come upon a middle ground decision, it is important that you keep your partner accountable. Don’t make your partner feel like his/her opinion was not considered. Communication is the key to a healthy marriage life. It will ensure that you are on the right path.

Conclusion:

Financial compatibility plays an important role in couples. Don’t let financial incompatibility be the reason for issues in your relationship. All the above factors will help you to grow your financial compatibility and will help you in the present and future too.

October 9, 2020August 22, 2023

The Complete Beginner Guide to Budgeting

In today’s fast-paced world, managing your finances has become more crucial than ever. Whether you’re looking to save for a dream vacation, pay off debts, or simply gain a better understanding of your spending habits, creating a budget is the foundation of financial success. If you’re new to budgeting, fear not! This informative and human-friendly guide will walk you through the basics of budgeting and help you get started on your journey towards financial stability.

Understanding the Basics of Budgeting

Budgeting is essentially a plan for your money. It’s a tool that helps you allocate your income to various expenses and financial goals, ensuring that you have a clear overview of where your money is going. The ultimate goal of budgeting is to spend less than you earn and make intentional choices about your financial priorities.

Creating Your Monthly Budget

Calculate Your Income: Begin by determining your total monthly income. This includes your salary, any side gig earnings, and other sources of income. This step will give you a clear picture of how much money you have to work with.
List Your Expenses: Make a list of all your monthly expenses. Categorize them into fixed expenses (e.g., rent/mortgage, utilities, insurance) and variable expenses (e.g., groceries, entertainment, dining out). Don’t forget to include periodic expenses such as annual subscriptions or quarterly bills.
Set Financial Goals: Define your short-term and long-term financial goals. Whether it’s building an emergency fund, paying off debt, or saving for a major purchase, having specific goals will guide your budgeting decisions.
Allocate Funds: Distribute your income to cover your expenses and contribute to your financial goals. Start by covering your fixed expenses and then allocate funds for variable expenses. Be sure to prioritize your goals during this step.

Practical Budgeting Tips for Beginners

Be Realistic: When creating your budget, be realistic about your income and expenses. Overestimating your income or underestimating your expenses can lead to frustration and failure.
Track Every Expense: Keep track of every penny you spend. This will help you identify areas where you might be overspending and make necessary adjustments.
Emergency Fund: Always allocate a portion of your budget to an emergency fund. Life is unpredictable, and having a financial cushion will prevent you from derailing your budget in case of unexpected expenses.
Review and Adjust: Your budget isn’t set in stone. Regularly review your budget to ensure you’re staying on track and making progress toward your goals. Adjustments might be necessary as your circumstances change.
Use Technology: Take advantage of budgeting apps and tools that can simplify the process. Many apps categorize your expenses automatically and provide visual representations of your spending patterns.
Stay Disciplined: Budgeting requires discipline and commitment. Stay focused on your financial goals, and remind yourself of the rewards that come with responsible money management.

In conclusion, budgeting is a powerful tool that can help you take control of your finances and work towards a more secure financial future. By understanding the basics of budgeting, creating a well-structured monthly budget, and following practical tips for beginners, you’ll be well on your way to achieving your financial goals. Remember, the key is consistency and a willingness to adapt as your financial situation evolves. Happy budgeting!

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Tag: Budgeting

5 Things You Should Know Before You Start Investing

How Financially Compatible are You with Your Partner?

The Complete Beginner Guide to Budgeting

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