Financial Leakage Syndrome
I am sure you won’t be aware of all your daily expenses and where does it blow away every month.
That's because,
- There are some small daily expenses, which you are not aware of
- You are careless about your finances like paying the only minimum payment on a credit card
- Spending on depreciating assets if you get a lump-sum amount
- Not investing in the right asset class based on a time horizon that leads to low return
Some tips to reduce leakages:
- Understand your basic cash outflow. You may feel like you know all your expenses. But that may not be true!
- You can reduce your electricity bill by using your air conditioner and other items wisely. Switch it off when not needed. This may seem obvious but we ignore it mostly.
- Your addiction may be a major part of your expense like alcohol, cigarettes etc. Reduce your such expenses.
- Use a credit card to pay your bills. This will help you to track your expenses. But pay the total o/s amount every month.
This can help you to reduce financial leakages, which will lead to more savings and achieving your goals easily.
This post is inspired by a book "The only Financial Planning Book that you will ever need" by Amar Pandit
Thoughts?