15 tips to Financial Fitness 1

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15 personal Finance tips to make you financially fit

The financially successful people believe 80% right behavior and 20% knowledge on finance is required to become successful in personal finance.  Here, in this article, I’ll discuss on these 15 magic habits which can make you financially successful in life.

1.Make a monthly budget:

The first and most important financial habit is to make a monthly budget for your family irrespective of your profession or family size. Sit down with your family members and identify each and every common expenses of every month. For preparing a good budget, you may require 3-4 months expenses details.

Search the internet and find free budget planner spreadsheet for creating monthly budget. Here is a very good link on “How to prepare Monthly Budget.”

Include every necessary items and even entertainment expenses also as a head in your budget and try to stick to that monthly budget. You may require more shopping or occasional expenses in any particular month, keep that also in your monthly budget. After every month, watch the differences of your actual and budgeted spending and try to minimize the differences in every month.

2.Stop overspending:

Before going to market or shop, list down the necessary items for buying. This will stop your habit of impulsive buying. You may find any sale is going on the items which you do not require at this moment then stay away from that because buying unnecessary items on sale does not make you save money but to spend you more than your budget. Click here to get tips on “How to control Overspending

personal finance tips on spending

3.Pay the fixed expenses  and others at the beginning of every month:

Every family needs to spend some fixed expenses , amount may vary little bit each month, but you need to pay these bills irrespective of the situation, like- utility bills, children education fees, insurance premium, debt payment (if any)etc.

A responsible family earner also invests regularly in different funds. Pay these fixed expenses bills at the beginning of every month and automate the investment transfer system in such a way that money transfers to different funds account as soon as salary/income credited to your account. This system will forcefully make you invest more and pay the bills in time. In this way, you’ll be left with only the money for monthly family expenses and you’ll not be able to overspend even you desire to do so.

4.Identify your financial goals:

We all have some goals in our life irrespective of our age. Identify your major financial goals in life. The goals attached with a money value, is known as Financial goals, like-buying a house, secure retirement, international vacation plan, children higher education fund, etc.

Identify each and every of your financial goals and classified them as long term and short term goals. Then invest money for each goal in different fund depending on the time frame and your risk appetite. Here in this article you’ll get full guidance on how to manage your financial goals: Free Financial Goals Calculator.

5.Know your risk appetite:

One’s financial risk appetite depends on the age, family income, family size and many other parameters. Here, from this article, you can check your financial risk appetite: Know your Financial Risk Appetite. Now depending on your risk appetite, select the investment vehicles for you.

6.Pay off your debt as soon as possible:

If you have any debt then pay off your debt as soon as possible. Because loan or debt not only have principal amount but it also attracts the interest on every month. Sometimes, interest on a long term loan may exceed the principal amount, so pay the debt first even before starting investment for your financial goals.

7.Don’t let your money stay idle:

Never let your money stay idle because you may lose the interest /return on the money for keeping your money idle.

8.Diversify your investment:

Never ever keep all of your investment in one type of investment vehicle. Diversify your investment proportionately in direct long term equity, debt, mutual fund, PPF or employers’ provident Fund, or in other areas depending on your financial risk appetite.

9.Stop using credit cards:

Try not to use credit cards on regular basis. Because we can’t recognize the money is washing out while using credit cards as physical transfer of money is not happening. This feeling make us spending more. So, doing more cash transaction will help you to stop overspending.

10.Make enough health insurance of all family members:

A lot of money can be washed away due to hospitalization or sudden physical problems of any of your family members. This may create hamper on your investment plan, so make proper amount of health insurance of each and every family members to prevent this.

11.Make life insurance:

If you are the only bread-earner of your family then make enough life insurance so that your loved ones may not face any problems if something happens to you.

12.Start retirement savings at your early age:

Retirement is a very important aspect in anyone’s life. Calculate your retirement corpus and start investing at an early age to have a secure retirement life.

13.Make proper emergency fund:

Emergency fund gives us a back up of our daily needs while we have no income or have very less income for surviving. This Fund amount differs from family to family. Normally one family needs to maintain 3 to 12 months’ living expenses as emergency fund. Living expenses means only the necessary expenses but not the entertainment expenses. Here calculate your emergency Fund Requirement.

14. Do not depend on one income source:

If you are the only bread-earner of your family then encourage your spouse for working on leisure time or try to search for other income source. In today’s uncertain world, it may be dangerous to depend on only one income source. Search the internet and you’ll find many flexible job opportunities, like-mystery shopping, freelance writing, virtual assistance, paid surveys, etc.

15. Educate your children about money:

We normally don’t educate our children on money related matters from their early age. But it is essential to educate the children properly to make them expert in financial matters. Check this article: Personal Finance Guide for Kids.

Follow these tricks and I hope within few months you’ll find the fantastic result in your financial condition.

Have a great Future.


About Moonmoon Biswas

Moonmoon Biswas is an Equity research analyst . She has more than 10 years of experience in this field. She has proven track record in the field of Technical analysis and the Fundamental analysis. From the educational background, She is an MBA-Finance with CFA (India). She has work experience in the leading broking houses in India and has also in hand experience in Australian Security Market. She has her own equity research firm and currently also engaged in digital marketing.


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