How to manage your finances - Tips to manage your finances/money | AU Small Finance Bank
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How to Manage Your Finances this Season

    Everyone needs to save for the unexpected. And by smartly managing finances, we can all easily withstand our short-term financial disparaties.
    In light of the business uncertainty we face in the coming weeks, we all need to make some sound financial diescisions to secure our wellbeing. 

    In this section, we share a few tips on managing your finances during this season:
     

    1.    Use Your Savings Wisely


    It’s time to make smart decisions with your savings. Figure out how much you need.  Construct a detailed list of your rents, utility bills, insurance, salaries, property maintenance, etc. Track your spending and income to get an accurate picture of your financial situation.
     

    2.    Continue Investing Small Amounts in Recurring Deposits


    Take out a small amount from your salary and invest it in a recurring deposit every month. Smart and safe, RD is an ideal saving option if you do not want to take any risks with your investments. Recurring deposit accounts also offer the facility of withdrawal of the account anytime. While the bank might charge a small fee for pre-withdrawal, it is still a good option to have, in case you need urgent funds.
     

    3.    Contribute Gradually into Fixed Deposits

     
    A fixed deposit is yet another safe investment option. Unlike other investment options, FDs are not market-driven. You get an assured sum of money at the end of the maturity period. Moreover, FDs are liquid.  You can withdraw your FD as and when needed. This feature, assures you, that you always have a certain sum of money to bank on.
     

    4.    Invest in Mutual Funds  - It's safe!

     
    A Mutual fund is a simple, tax-efficient tool to invest. It enables investors to pool their money together into one professionally managed investment. Systematic Investment Plans (SIPs) are mutual funds that not only allow you to invest in  smaller amounts, but also help you maintain a disciplined approach to savings and investment. Moreover, since Mutual Funds in India are regulated by the Securities and Exchange Board of India (SEBI), your investment is safe.
     

    5.    Invest in Gold


    At a time of financial uncertainty, high inflation, depreciating exchange rates and economic recession, gold is also a better investment than the stock market. During a recession, stocks may fall as companies make less profit. Your gold will still remain a financial asset for you during bad times. The reason is that gold has an intrinsic value. Studies show that gold prices have positive price elasticity, meaning the value increases as the demand increases in the future.
     

    6.    Use Compound Interest as Your Emergency Funds

     
    Each time your bank pays interest (be it daily, monthly or annually), you earn a certain extra amount along with your original deposit amount. Set this extra amount aside to cover unexpected expenses, such as unforeseen medical expenses, home-appliance repair or replacement, major car fixes, etc. This practice can keep you afloat in a time of need without having to rely on credit cards or other important savings. 
    During a crisis, it’s important to draw a line between emergencies and everything else. Do take the necessary steps now to increase your financial security in the coming weeks.
    Also, know how Covid Shield Fixed Deposit will help to deal with finances for health emergencies
     
    To manage your finances this season, get to know more about five essential financial instruments considered in the FY20 financial plan.