Keep calm and handle a cash crunch like an expert

Let’s be honest; adulting is tough. Yes, as a millennial grown-up, the freedom of being financially independent is exciting – buying anything you want, going out for dinners, clubbing with your squad, taking holidays and leading an extra life without having to answer to anyone. But there is a not so glamorous side to it as well. Millennial adulting comes with a lot of responsibilities; the most crucial of it is managing your money. If gone awry, it will have you shook!

Well, we don’t want you to be salty about life, so we are about to give you ten tips on how you can take care of your finances beautifully while managing a cash crunch like an expert if you ever find yourself in that situation.

How to slay a cash crunch?

Mismanagement of money can escalate quickly. Missed making a payment for a month? That is an added burden plus interest to be paid in the subsequent month. Shopped too much? It may mean you don’t have enough left for essentials.

So how can you stay on top of your expenditure?

The answer lies in budgeting. Make the budgeting excel sheet your best friend and you will be able to avoid unnecessary stressful situations. 

However, life is full of surprises. You can budget like a monk on a mission and still find yourself facing an unexpected cash crunch. It could be an unfortunate medical emergency or a sudden personal commitment.

The first thing to do in such a situation is not panic. Just breathe, take a step back and think of what you can do to beat it.

What you need is a solid plan. Here are a few things that you can give a shot:

Prioritize expenditure: Pick out vital expenses and keep non-essential expenses on hold. Paying utility bills, phone bills, buying groceries should be the top priority. The latter would include eating out often, shopping, watching movies, indulging in an expensive sport, etc. You can also identify expenses that get deducted from your bank account every month. These could be your Netflix subscription or Amazon Prime delivery. These would not have mattered earlier, but they need to be cut off in a time of cash crunch.

Figure avenues of liquidity: If you need a substantial amount of cash immediately, think of liquidity options. This could be breaking FDs, redeeming mutual fund investments, taking a loan on your credit card, mortgaging gold coins or Jewellery, taking a personal loan, etc. Figure out which option is best suited for you in terms of interest paid and repayment ability. 

Make small lifestyle changes: See where you can save costs by changing your lifestyle without causing too much inconvenience. If you travel to work by car, figure out a way to carpool with colleagues or take the train a few times a week. If you shop at upscale supermarkets, start shopping at discount/wholesale shops. If you go out every Friday night, change it up by inviting friends over at home and ask them to BYOB. Isn't that what being a millennial is all about? You will be amazed at how much you can save every month.

Unleash the magic of HDFC Bank HDFC Bank Millennia Credit Card: A lot of young millennials are afraid of Credit Cards, or just don’t trust themselves with one. Learn how to tame your Credit Card and you will be financially sorted. Figure out your credit period and payment due date. Distribute your purchases so you can make optimal use of the 45-day credit period. As long as you make payments on time, those little plastic cards will not turn scary. In fact, if used optimally, the Millennia Credit Cards may assist you from getting into a cash crunch in the first place.

Credit cards are extremely vital when it comes to building your credit score too. A good credit score is built on the expenditure you make via the card and the payment history. This score will play a major role in getting a car, personal and home loans going forward in life. The earlier you start building this score, the better.

What next?

Once you have overcome a cash crunch, the next thing to do is make contingency plans to avoid another one in the future. Use HDFC Bank Millennia Credit Card intelligently to balance expenditure and payment. 

Take your monthly income and work backwards. Allocate funds for basic expenses. Next work on creating an emergency fund invest in life insurance and medical insurance. Set aside an amount for SIPs. From the remaining income, take an amount for travel, entertainment, shopping, etc. 

Heed to sage advice from Warren Buffett, “Do not save what is left after spending. Spend what is left after saving.” He knows what he is talking about. After all, he is one of the world’s richest men.

Manage your finance with Millennia Credit Card, apply now!

Read more about the different Millennia Credit Cards available here.

*Terms and conditions apply. Credit Card approvals at the sole discretion of HDFC Bank limited. Credit Card approvals is subject to documentation and verification as per Banks requirement.