Manage your Personal Finance more effectively
“It’s not your salary that makes you rich; it’s your spending habits.”-Charles A. Jaffe
Yes, it doesn’t matter how much you actually earn but it matters how you manage your earning to have a financially secure life. There are thousands examples of people who had earned in millions in their youth but were in poverty in their old age due to poor management of their income.
They suffer because they had no knowledge on how to manage their earnings. But in the era of internet, you can educate yourself on any area within a fraction of time. You can be a master on your personal finance. Always remember one thing-“If you born Poor, It’s not your mistake, But if you Die Poor, It’s your Mistake”.
In this article, I’ve shared the concepts which you should do to make your life financially comfortable.
1. Follow Budget:
Identify your monthly expenses and classify into two heads i.e. Fixed expenses and variable expenses. Then make a monthly household budget depending on last 3-4 months’ average expenses. Include all type of expenses head and allot money under each head including entertainment expenses and Investment.
After prepare the budget, follow it whole heartedly.
2. Control spending: If you follow the budget then automatically your spending will be in control. But still you can do two things to stay away from impulsive buying:-
Making a list before going to buy anything
Avoid making excessive credit card use because while you don’t feel that hard cash is going on while using credit card and this feelings tempted us to make more spend.
3. Repay the loans and bills on time: Repay the instalment of your loan and bills including credit card bills on time. Generally non-payment of bills attracts interests which are wastage of money and may overshoot your budget. So be careful, pay the bills on time and try to pay off all your debts as soon as possible even before starting your investment process. Be a debt free person.
5. Clearly Define your Financial Goals: We all have some dreams in life, like- a dream house, international vacation, Higher education of children, etc. Clearly identify each and every dream and give a date to those dreams to make those financial goals in life. Now manage your finances and investment in such a way so that you able to fulfill those goals of your life.
7. Increase investment as income grows: Revise your investment regularly and increase your investment amount as your income grows. Invest a certain portion of your bonus in special investment area and invest at least 50% of your increment on monthly basis.
8. Make enough health Insurance of family members: Sudden heavy medical bills can wash away all your savings. So be prepared and make enough amount of health insurance of all your family members.
9. Make life Insurance: Life insurance is the shield to protect your loved ones from any unexpected happenings in absence of you. Make proper amount of life insurance of the bread-earner of the family.
10. Regular Discussion about financial matters with your spouse: This is very important to have a secure and peaceful life. Regular discuss with your spouse/ family members on the family budget and investment areas.
Have a Happy life with your loved ones.