Pro Personal Finance Tips 2024

Getting your debts zero is everyone objective, but this is possible only when you manage your personal finance effectively. As during this COVID-19 pandemic 😷, this is immediate need for you to manage your money and in this regard, I would like to share 9 most useful personal finance tips into one mug, super helpful read. 

Pro Financial Tips 

1. Create a Financial Calendar 📆 

This is the best way to remember important financial reminders about your tax dues, tax returns etc. such small task are as important as your check-ups with doctors or car service. 

2. Check Your Interest Rate

Rank your debts in the order of interest rates (high to low) and paying attention to interest rates will help inform which loan or savings commitments you should focus on.

3. Check Your Net Worth

Checking your net worth is the only way to find out where you stand financially. Your financial assets will appreciate you and your liabilities (debts) will warn you through your life until you pay off timely. Invest in assets not liabilities.

4. Follow 50/30/20 Budget Rule

The ultimate lifetime plan is always spending less than you earn, your finances will always be in good condition. Try to differentiate your needs and wants, live within your income, limit your debts. Divide your after-tax income and allocate it to spend 50% on needs, 30% on wants and 20% on savings and investments. Build a habit to make savings part of your monthly budget. It is really that simple. 

5.  Set Up Emergency Fund

This probably one of the most important aspect emerge out of COVID-19 pandemic. Try to keep any amount (no matter how much is your debts) aside in some recurring deposits or liquid mutual funds for emergency purpose. Having money in savings to use for emergencies can keep you out of financial distress and help you sleep better at night.

6. Short Term Financial Goals

Setting short term financial goals is an important step towards becoming financially secure. If you do not set any such financial short-term goals, then you spend your earnings as you like. You may set goals for buying a mobile phone, car, plan for vacations etc. 

7. Keep Credit Score High

Understand your credit score and credit reports is also an important tip for personal finance for young generations. Nowadays you can get free credit reports online https://www.bankbazaar.com/credit-score.html. It gives you overall insights of your debts and you can improve credit score (if low) by paying overdues on time.

8. Secure Your Life with Insurance

Yes, paying insurance premium for your life is not an expense, this is an investment for any unexpected tragedy in life. This is important to protect your family first. So, keep this tip on the top of your financial planning.

9.  Invest in Yourself First

Before you get crazy with investing any of your money, invest in yourself. This can include investing in your financial education, taking classes, buying courses or books, starting a side hustle to make extra cash, etc.

The best asset you have is yourself.

 The Bottom Line (Abstract)

You don’t need any finance or MBA degree or any specialised software skills to manage your personal finance, all you need is just follow above 9 pro personal finance tips and rules to act like a professional. 

 

Pro Tips to Manage Your Emergency Fund

An emergency fund is a savings account set aside for unexpected expenses, such as a medical emergency, car repair, or job loss. It is generally recommended to have 3-6 months' worth of living expenses saved in an emergency fund in order to cover unexpected expenses and maintain financial stability during a crisis. It is important to have easy access to these funds, typically through a savings account or a money market fund. It is also recommended to make regular contributions to an emergency fund in order to build it up over time.

Managing an emergency fund involves setting a savings goal and making regular contributions to the fund. Some steps to manage an emergency fund include:

1. Set a savings goal: Determine how much you need to save for unexpected expenses by calculating your monthly living expenses and multiplying that by the number of months you want to have saved in an emergency fund (usually 3-6 months).
2. Make regular contributions: Set up automatic transfers from your checking account to your emergency fund on a regular basis (e.g. weekly or monthly) so that you are consistently saving money.
3. Keep the money easily accessible: An emergency fund should be kept in a savings account or money market fund that you can access quickly in case of an emergency.
4. Avoid using the emergency fund for non-emergency expenses: It is important to only use the emergency fund when absolutely necessary, such as in the event of a job loss or unexpected medical expenses.
5. Review the balance regularly: Keep track of the balance in your emergency fund and make sure you are on track to meet your savings goal.
6. Keep the savings separate from your other savings or investment account.

By following these steps, you can effectively manage your emergency fund and ensure that you have the money you need to cover unexpected expenses.