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 ๐ท, 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 ๐
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.
