Dodging Financial Uncertainty

We welcome you to the first edition of manageME7 newsletter - a newsletter dedicated to help the manageME7 community lead a financially tranquil life.

Nobody can envisage what lies ahead. If we were able to foresee our future, we would have planned accordingly and saved ourselves from getting trapped in the financial web. In this newsletter we have highlighted the financial uncertainties in the life of business owners, students, homemakers and employees.

Let us start with homemakers.

1 Homemakers: While analyzing our budget at the month´s end, most of us goof ourselves with the missing links in our finances. This is primarily due to lack of money management on our part. Also, there are various uncertainties relating to inflation, non-availability of commodities etc. All these result in price hike of sundry consumer products, which in turn have a negative effect on our monthly budget. This may compel us to take help of credit cards, which again add to our financial qualms.

Stratagem: In order to tackle uncertainties, we have to be proactive in money management. Categorize your financial goals into long-term and short-term goals is the first step. You will then need to adjust your income and expenditure accordingly to achieve them. Evaluating them on regular intervals is always advisable. To future proof your finances, it is recommended that you save some percentage of our monthly income. However, it should be done in such fashion that the monthly budget remains unaffected. This will help us to meet our financial needs in times of paucity of money.

2. Students: Most of us experience dearth of money during college days, as we try to live off on allowances from our parents or depend on student loan. The financial situation gets worsened by change in life style, high tuition fee, uptake of education loan(s), soaring telephone bills, fuel expenditure, and much more. All of these get compounded together and result in a financial fiasco. Inability to pay back education loan is worsened by interest amount which gets piled up each month. Thereby, it becomes very important that we manage our money effectively.

Stratagem: We must track our finances, both income and expenditure, on regular intervals and never ignore the warning signs. It doesn´t take long for a small financial gap to catapult into a huge financial burden. Making wise use of credit cards, looking for part time jobs and other likely solutions will help you to overcome financial troubles during college life.

3. Employees: As we enter in the job phase, our life style changes. Frugality may take a back seat as we want to enjoy all such amenities. All these have a direct bearing on our financial health. However, there is a degree of uncertainty associated with jobs too, viz. longevity, job retrenchment, unexpected downfall of the company etc. Protective measures must be taken to insure ourselves from miscellaneous risks associated with jobs.

Stratagem: We must try to save some percentage of our income on regular basis. This may help us to meet financial needs in the times of job retrenchment. Upgrading or acquiring skills that may help you to get a better job is a wise way to prevent un-welcomed situations. We must also try to analyze our financial needs and become stinting in spending habits

4. Business owners: Handling a business means forecasting the future needs, incorporating forecast in the making of a sound plan, and to achieve the overall goal of a company. The business plan must be backed with effective strategy, keeping in mind the future needs. Outcomes of unanticipated changes like political movement, recession, inflation, bankruptcy, acquisitions, competition or terrorism can have an inevitable negative impact on business. Hefty capital might be required to deal with such an impact. Implementation of few money management techniques can help and keep financial worries at bay.

Stratagem: The pre-eminent solution to overcome business uncertainties is to handle finance wisely. After distributing the profit and dividend, a set percentage of funds must be saved for utilization in business purposes only. In addition, we need to be vigilant all the time regarding government policies, competitors, market, economic conditions etc.

Money Management can be taught in school as a separate subject. Besides, one can always go for insurance policies to not only reduce risks, but also avail tax benefits. Even the slightest changes in the budget, spending habits and overall lifestyle can make a difference in the degree of financial contingencies.

A prudent approach along with management can indeed help you save.

We hope that you have a safe financial month. We will be back with another edition next month and who knows that story might be yours.