Earning money is not that much tough how much it is with managing the money as per proper plans. The way you save and invest your money according to the priorities and appropriate investment plans for the security of your future is called personal finance. All the activities like the way you budget, the way you manage your bank accounts, insurance policies, mortgages, loans, retirement plannings, tax and many more comes under your personal finance. If you don’t have a proper financial plan, you may face many problems during the hard times. Personal finance planning keeps you relaxed and secured all the time. Here a few tips which are considered to be the most important to manage personal finance.
1. Planning is essential after the fixed monthly salary gets added to your account. You cannot avoid the payment of all the necessary things for your living like electricity bills, rent, loan amount, groceries, phone bills, etc. Consider 50% of your salary behind this stuff. Now, besides the essential living, you also need a social and relaxing life. Out of the remaining 50% calculate 30% of your salary for parties, dinings, shopping, etc. The remaining 20% should be your savings for that month.
2. As money management is quite a difficult task, nowadays it has been made immensely easier through using various smart apps where, and you can quickly note how much expenditure you are doing from it. This helps you in limiting your expenses as well.
3. Be very sure and active before investing your savings for a plan or term. You should choose the best strategy for which you need to do a lot of researches. There can be risk factors and possibilities for frauds. It’s better to pick Government-owned or renowned private institution plans for investment.
4. A smart financial planner will always avoid debts. Try to get out of debts and pay the respective amounts to whoever you need to spend on time. If you are willing to purchase anything, go for installments or try to make sure that you can buy that by paying the whole amount. Debts create a burden on your personal finance. For this, you need to be very cautious with the use of your credit cards. This creates liabilities. Don’t forget to monitor your credit score too.
5. Don’t invest all your liquid cash to long term investments. It is always necessary to remain prepared for severe or unwanted situations when you may need a lot of liquid money. Thus, keep some amount in hand or make it invested in flexible terms so that they can be broken whenever necessary.