4 Ways To Manage Your Personal Finances Better

Financial management is something which people today perform very seriously. Personal finances while not as complicated as corporate financial issues. Personal financial planning as a basic step necessitates the inculcation of a habit to save on a regular basis. It maybe a small sum initially but gradually it will turn into a routine which will hold you in good stead in long term. Money management is a very critical part for the average individual or household.
 
When planning your finances the basic premise is to learn to live within your means and accordingly setting long and short term goals. Some of the things to keep in mind when planning the structure of personal financial management are:

Budget design:

The primary step must be setting a well planned and thoroughly thought through plan of incomes and expenses management or a budget programme. It lists both the sources of money inflow as well as outflow. A proper planner should be handy which tracks items such as utility bills, other household expenses, travel, investments, salary earnings, bonus among others. A prudent financial manager keeps reassessing the budgets such as enhanced expenses due to increment in cost of living or allocation excess inflows as a result of a performance bonus or pay increment due to promotion. Reassessment of budget also involves regularly checking bank statements and bills to track. A well served idea to manage personal finance in India is to keep a number of bank accounts. One may distribute the income pool to different accounts which in turn may be pre designated to meeting particular budgeted expense items.
 
Proper credit management:

One should carefully monitor payment terms and cycles of credit card and other loans and debts to avoid unnecessary interest and penalty charges.
 
Investment and savings goal:

One should have a clear goal and structured plan to generate timely savings and then to channel the same into carefully timed investments whether the same involves mutual funds or ULIPS. Many are presently considering gold purchases as the metal looking weak globally. The best financial planning in India always involves gold investments.

Retirement and savings planning:

One should plan for unforeseen expenses and invest a non negotiable proportion of the monthly income in either money market or high return bearing government deposits or bonds. This will serve as a fall back in times of distress. Keeping in mind inflation and time value of money as such, invest a sizeable sum in retirement funds beyond the generic options.

Personal money management must be done keeping in mind items such as taxes, health expenses and adequately consider self control and life within the means available and refrain from frivolity.

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