Be it for an individual or a family, financial management is a very important aspect. Managing one’s personal finances is vital in order to save and keep various financial risks at bay. When we talk of planning personal finance, one needs to take into account a variety of things into consideration. Be it expenses, debts, savings, retirement, insurance, budgeting etc, one needs to understand all the topics well to make sure that a strong financial plan is put in place for the future.
With the start of the new year, take a look at these certain rules of Personal Financeplanning that one needs to keep in mind if he/she wants to save some of their hard earned money by the end of the year and enable them to fulfill certain goals in the future:
● Need to create a Budget: If an individual intends to plan his/her finances in a better way, the basic thing needed is to put in place a budget. Doing this enables the individual to know where the money is being spent. This helps them in identifying the areas where the money is being spent and enables them to plan their expenses appropriately. Budgeting helps individuals to cut down on unnecessary expenses and helps them to put their money in a place which will be rewarding in future. Prior to putting a budget in place, it is imperative for the individuals to be aware of his/her net worth and goals, assess their risk-taking ability as well as identifying the areas where to invest.
● Save a certain percentage of the Monthly Income: When it comes to planning one’s personal finances in a better way, it is always beneficial to start saving a certain amount from the monthly income of the individual. This helps the concerned person to be well placed, in case there is an emergency. Doing this consistently also ensures him/her in achieving the future goals that they might have set themselves.
● Securing oneself and the dependents: When one intends to plan his/her personal finances, the question of taking up certain risks do come up. And considering this the individuals must make sure that the risks which are taken are covered. By covering the risks, it enables the individuals to not only secure himself/herself but also the lives of his/her dependents. This can be done by buying insurance policies with regards to death, health issues and accidents. The insurance policies can also double up as investment options for individuals and can be quite beneficial in covering the finances for future goals by getting hold of endowment and child policies.
● Get out of Debts: To ensure that one can plan his/her personal finances better, it is mandatory to get out of debts. Irrespective of how small or big the debt might be if one only pays the minimum amount due it can take a long time to clear the debt. This ultimately results in the individual paying a lot more money than he/she might have borrowed courtesy the high-interest rates.
● Paying Taxes: Though many people view paying taxes as something that eats into one’s finances, it is not exactly the case. On the contrary, paying taxes can help in increasing the gains. To plan one’s finance better without needing to evade taxes, an individual can spit tax saving investments, tax payment and filing of returns into separate heads. Doing this at the start of every financial year will enable the individual in cutting down on the amount paid as penalties as well as maximize exemptions and deductions.
● Monitoring Investments are mandatory: In today’s world, Investments form an important part of a financial plan for every individual. However, if not monitored well all investments that individuals make can go to waste. Hence, it is important to periodically review the investments either on a quarterly, half-yearly or annually. Doing this ensures that the individuals can take corrective measures with regards to their investments as may be deemed necessary due to the prevalent market conditions.
Apart from the above points, the most important thing that individuals need to do is to stay aware of the changes that take place around them. And with many online portfolio trackers and money making websites available, managing one’s personal finance have never been that easy. The recently launched BankBazaar app can also hugely beneficial for individuals in managing their expenses better by keeping a track of their transactions. The app also helps individuals by providing tips and advice on managing their finances and financial products which will serve the purpose of the individuals depending on their needs.
If you are one of those individuals who is considering to start planning your personal finance in a better way than in the past, you can consider the above-mentioned points discussed as well as download the BankBazaar App from Google Play store to get a headstart – DOWNLOAD NOW!