Are you really interested to improve your personal finance? If you are tired of worrying about money, then it is a perfect time to get a hold of your personal finance. You should focus on organizing your personal finance. Personal finance planning helps you to determine your short term and long term financial goals. Here are some tips that can help you to manage personal finance in an effective manner:
1. Track your spending
Do you know how much you spent on eating out last month? How much you spent on buying petrol? Take control of your money by tracking your finance. There are various types of apps available on the market which can help you to keep track of your finance. With this apps, you can monitor your regular expenses. Explore apps like Mint, Wally, and YNAB.
2. Invest at least 10% of your income
Saving is the key to manage your personal finance effectively. You can develop the habit of saving. Take out 10% from your income and put it into saving account. After 3 to 6 months, you can invest that amount in shares or other investment options. If you have a dream of starting a business, then you can utilize this saving as an investment in your business. 10% is the least amount you can save from your income. Consider saving more if you have better investment options.
Have you started saving?
3. Set up an emergency fund
This is the money you set aside in case of emergency. Emergency funds are stored in liquid accounts like savings or money market account. You can use this money when you fall ill or lose a job. Your emergency fund should be enough to cover four to six months expenses in case of an emergency. Keep emergency fund account separate from regular spending account.
4. Control debts
Most of the people have debt. Sometimes we borrow more money in hope that we will pay from future income. Our 50% income goes into paying loans and debts. Do not take many loans and overburden yourself. House loan is good debt. It helps you to create an asset. Credit card debt can give trouble with its high-interest rate. You should consider EMIs within 25 to 30% of your net income. Make a proper strategy to pay your debt in a short time duration.
5. Be financially literate
To manage and improve your personal finance, financial literacy is important. You can start with the basics. Learn the concepts of budgeting, savings, investment and compound interest. Read books, newspapers, magazines, and blogs that can guide you for better financial management. Start using financial management tools. Talking to an expert advisor can also enrich your finance knowledge.
Can’t keep up with bill deadlines?
6. Automate regular bills
The world is becoming fully digital gradually. There is no need to go to the office and pay your loans, bills, and fees. You can now easily arrange online setting for automatic debiting. It will save your time. With an automatic payment of your bills, you don’t have to worry about late fees.
7. Have more income sources
The competition is becoming cut-throat in the job market. There is no concept of job security that exists anymore. Anyone can get fired or get a salary cut. In this scenario, it is good to have an additional source of income available. There are various opportunities that you can give it a try like a weekend class tutor, application developer, social media consultant etc. You can consider launching your small business. If your one income source gets shut down somehow then you can rely on other income sources.
8. Save money on online purchases
People have started preferring online shopping. Online shopping offers many perks. You can get cash back and amazing offers. For example,
Ebates is a very popular online shopping site. Ebates offers $10 bonus to their new users. You will get directly get your cash payment to PayPal account. Ibotta is another rebate site. They also pay $10 to new users. Find out some amazing online stores and start getting cashback.
9. Ask for advice
Saving is not enough. You have to start investing your money to increase the wealth. To make the right investment decisions, consult a financial planner. A financial planner will help you with the budget. The expert will share risk involved with each investment. Investing is a long-term strategy. Make sure you have the right expert to guide you for a better investment.