In the complex universe of finance, it’s easy to get caught up in a cycle of fees and commissions. Taking control of your finances is essential for your security and independence. In this blog post, we’ll guide you on becoming your own money manager, from setting goals to smart investing.
The Context
The world of finance can be challenging, often resembling an addictive cycle. Once you’re hooked, you find yourself constantly paying fees and commissions for that necessary financial boost, hoping for average profits.
At PlanB, we prioritize your financial literacy, personal growth, and success. While we acknowledge the systemic nature of this setup, our financial literacy movement emphasizes taking charge of your finances. Even when outsourcing certain aspects of your personal financial enterprise becomes necessary, we encourage you to make optimal decisions.
Well, taking control of your personal finances is a crucial step towards attaining financial security and independence. By becoming your money manager, you gain a deeper understanding of your financial situation, make informed choices, and work towards achieving your financial goals.
In this blog post, we’ll explore essential steps and resources specifically tailored for common Indian investors, helping you manage your own money.
Let’s get started!
The Role Of a Money Manager
A money manager is typically a professional or an individual entrusted with the responsibility of managing and making investment decisions on behalf of individuals, organizations, or funds. These experts can be employed by financial institutions, and asset management firms, or work independently as advisors.
The primary role of a money manager revolves around overseeing and expanding their clients’ investment portfolios. This involves analyzing market trends, researching potential investment opportunities, and creating strategies that align with their client’s financial goals and risk tolerance. Money managers have the flexibility to invest in various asset classes, including stocks, bonds, mutual funds, real estate, and alternative investments.
In addition to managing investments, money managers closely monitor the performance of their client’s portfolios, making necessary adjustments when required. They keep their clients informed about the progress of their investments, offer financial advice, and guide them in making informed decisions based on their specific financial objectives.
It’s important to note that while money managers handle investment decisions, they differ from financial planners or advisors who provide comprehensive financial guidance covering areas such as budgeting, debt management, retirement planning, and estate planning. Money managers primarily focus on investment management.
Whether you choose to hire a money manager or become your money manager, the ultimate goal remains the same: effectively managing and growing your wealth over time, considering your financial objectives, risk tolerance, and investment preferences.
While becoming a professional money manager requires clearing certain exams to obtain SEVBI licenses for commercial practice, here’s how you can become your money manager, eliminating the need for paid third parties.
Step 1. Establish Your Financial Goals
To effectively manage your finances, it is crucial to establish clear financial goals. Take the time to identify both short-term and long-term objectives, such as building an emergency fund, creating an opportunity fund, saving for a down payment, or planning for retirement. By setting specific, measurable, achievable, relevant, and time-bound (SMART) goals, you will create a roadmap for your financial journey.
If you are embarking on this process for the first time, we recommend dedicating a few days or even a week to carefully write and refine your goals before committing to them. This allows you to truly connect with your goals on a deeper level.
For added tangibility and a personal touch, consider using a traditional pen and paper to jot down your goals. This can enhance the sense of connection and help you visualize your aspirations.
Step 2. Create Your Budget
It’s surprising how many individuals find themselves taken aback when they finally decide to put their budget down in writing for the first time. The process often reveals eye-opening insights into where their money is going!
A budget is an incredibly valuable tool that allows you to track your income, expenses, and savings. To start, make a comprehensive list of your income sources, including your salary, investments, and any side hustles you may have.
Next, carefully examine your expenses and categorize them into fixed costs (such as rent and utility bills) and variable expenses (like entertainment and dining out).
We have previously covered the concept of budgeting extensively in this blog. If you’d like to dive deeper, please click here to read the related articles at your leisure.
As you evaluate your spending habits, take note of areas where you can cut back or save more. Additionally, consider using mobile apps that can assist you in tracking your budget effectively. Some popular options include:
a) Moneycontrol
b) Walnut
c) ETMONEY
d) Monefy
Step 3. Track Your Expenses
We acknowledge the challenges of earning in today’s world and how tempting it can be to indulge in unnecessary spending, especially if you struggle with the concept of deferred gratification.
However, to become a successful money manager for yourself and your family, it is crucial to maintain regular monitoring of your expenses. By actively tracking your spending, you can pinpoint areas where unnecessary expenses occur and make appropriate adjustments to your financial habits.
If you’re looking for effective expense-tracking solutions, here are some popular expense-tracking apps in India worth considering:
a) Monefy
b) Money Lover
c) Expense Manager
d) Walnut
Step 4. Limit Your Financial Decisions
Is financial management solely about making quick decisions?
Well, the answer is a bit more nuanced. Through years of experience and practice, we have come to realize that effective financial management and investing often involve making fewer but well-informed decisions.
It’s not just about the quantity of decisions, but the quality that truly matters. Making precise and calculated decisions can have a significant impact on your financial outcomes.
Let’s draw an analogy to driving a car. The more time you spend on the road, the higher the number of variables and the likelihood of encountering a road accident. Similarly, in finance, making too many decisions can indicate a lack of conviction and potentially limit your long-term profit potential.
One way to counter this is by automating your finances.
Automating your finances simplifies the money management process. You can set up automatic transfers from your income account to your savings or investment accounts. Additionally, automate bill payments to avoid missing due dates and incurring late fees. Many leading banking apps offer these features, such as:
a) ICICI iMobile
b) HDFC MobileBanking
c) Axis Mobile
d) SBI Anywhere Personal
Step 5. Educate Yourself
Staying up-to-date with financial knowledge is crucial for effectively managing your money. And if you’re looking for top-notch financial literacy, consider yourself fortunate to have stumbled upon this valuable resource.
Feel free to browse through our blog, where we offer well-structured and intuitive insights on a wide range of popular asset classes, including stocks, bonds, commodities, cryptocurrencies, and art. Additionally, several Indian websites and resources provide valuable insights and guidance on various personal finance topics.
Here are some additional popular platforms worth exploring:
a) Moneycontrol
b) Investopedia India
c) ClearTax
d) Paisabazaar
Step 6. Start Investing Wisely
Investing plays a pivotal role in wealth creation and financial planning. It is essential to educate yourself about the various investment options available in India, including mutual funds, stocks, fixed deposits, and government schemes like the Public Provident Fund (PPF) or National Pension Scheme (NPS).
On our website, we provide curated content that encompasses the latest and most valuable information on these investment options. Whether you’re a beginner or seeking specialized courses to excel in the stock markets, we offer resources to help you navigate and make all the wise investment decisions.
As you expand your knowledge and get into the intricacies of the financial world, it’s crucial to apply what you’ve learned and challenge yourself to enhance your skills. To do so effectively, consider exploring specialized online investment platforms such as:
a) Zerodha
b) Groww
c) Paytm Money
d) Upstox
Conclusion
Taking charge of your financial future starts with embracing the role of your “own” money manager. By implementing the steps outlined above and leveraging the recommended resources and apps, you can attain financial literacy, effectively track your expenses, establish budgets, automate your finances, and make informed investment choices.
Keep in mind that the path to financial freedom demands discipline, patience, and unwavering commitment. Begin today and lay the foundation for a financially secure future.
Note: The mentioned websites, resources, and apps are provided as examples and do not constitute endorsements. Always conduct your research and choose platforms that align with your specific needs and preferences.
Invest wisely!
