ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to manage your money

Updated on August 5, 2012

We have lot of dreams: to buy new car, new home, new mobile, to give better education to children,it goes like that. But, do we really able to find money from our salary or earning, for that ? The answer may be ‘NO’, because we don’t know how to balance between our earnings and expenditure!. Our monthly expenditure will be always more than or at least equal to our salary. Slowly we become bankrupt, forget about investment!

Do your homework:

If you have a dream you should start saving the money. Try to balance between your earnings and expenditure. Do this exercise: Note down your earnings per month in left hand side of a sheet. Write your expenditure per month in right hand side of the same paper as given in Table 1.


Table 1:Earnings Vs Expenditure

Earnings
Expenditure
Salary
House Rent
Profit from business
Food
Other Income
Travel
 
Electricity Bill, Newspaper
 
Children's tuition fee
 
Miscellaneous expenses
Total Earning:
Total Expenditure:
Total Savings per Month= Total Earning-Total Expenditure=_________
 
Try to Balance between your Monthly earnings and Expenditure

If you are making a table like this, you will find that Your Total saving per month is a positive value. But is it really happening at the month end? If your answer is ‘NO, then you are spending more money than your expected expenditure. Find where you are spending more money and try to stop it, if it is not necessary.

Invest For The Long-Term:

After all these calculation you may find that you can save a certain percentage of your income every month. Invest this money for future, even if it is a very small value. Choose an appropriate investment plan suitable to you. You can have bank fixed deposit, Mutual funds, shares etc...Try to deposit in more than one plan. Remember the proverb “Don't put all your eggs in one basket”. Invest systematically! Invest every month! You can see the magic of compounding in the money you invested.

The Magic of Compounding:

Start investing in your early age of life. If you have not yet started, start as early as possible. See Table 2.

Table 2:The Magic of Compounding your Investment

Age at which Investment Starts
Investment (Per month)
Value of your investment at different ages
Value of your investment at different ages
Value of your investment at different ages
Value of your investment at different ages
Value of your investment at different ages
 
 
15 Years
25 Years
35 Years
45 Years
55 years
1
500
2,00,810
6,21,580
17,12,946
45,43,671
1,18,85,842
10
1000
77,171
4,01,621
12,43,159
34,25,893
90,87,343
20
2000
-
1,54,343
8,03,242
24,86,319
68,51,786
30
5000
-
-
385858
20,08,106
62,15,798
40
10,000
-
-
-
7,71,717
40,16,212
50
20,000
-
-
-
-
15,43,434
(Assume 10 % returns per year to amount deposited)
Start Investing as early as possible. You will see the magic of compounding your Investment!
Start Investing as early as possible. You will see the magic of compounding your Investment!

Let us assume that, one parent starts depositing 500 rupees in his new born baby’s name, every year. The amount will be more than 2 lakhs when the children become 15 year old. The amount he deposited gets rolled over to 36 times at the age of 55. Now, if a person starts depositing 40 times more money at the age of 50, the amount at the age of 55 will be only 15 lakhs, rolled over to only 1.29 times of the money he deposited! Isn’t it surprising? This is the magic of compound interest.

Start investing as early as possible, even if it is a small amount. It will help you to achieve your dreams. Deposit small amount every month in your children’s name to give him better education, when he needs it. Deposit small amount every month to buy new house, new car and achieve your dreams !

Your opinion about this article

See results

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)