HOW TO PLAN PERSONAL FINANCE FOR BEGINNER

Finance, we often heard for big companies or in banking. Finances is related to money management. Money management is everyone’s business from single person to a company of thousand employees. Every person needs money to fulfill his desires. So, every person earns money through different occupations like, job, business or self employed etc. Money is managed by everyone as per their intelligence.

Here personal finance means management of money, planning for expense, saving and investment. For some people it is also planning for tax, making budget,  banking and planning for retirement. Everyone wants to live a life full of quality and luxuries. 

Here are the best ways to manage personal finance... 

1. Pay wisely,  and avoid credit card

Everyone buys things, but paying for these things may be different for everyone. Some people pay in cash, some in digital mode and some pay through debit or credit card. Paying through credit card is avoidable. In credit card there is a fix date when you have to pay back  the amount. If you did not pay the amount on due date, it will impose penalty as a loan but this will be of very high interest.

2. Avoid rumors and learn finance

There are so many people around us who try to cheat us with so many offers. These offers make money for them and take money from us. These people try to convince us to buy this and that products or invest here and there but these offers may be dangerous for us, If we do not know or do not learn finance. There are so many books that can be read to enhance our knowledge of finance.

3. Prepare budget with red mark on expenses

It is advisable to prepare budget before starting of month, and keep eye on expenses. Reduce expenses if possible, eliminate irrelevant expense. Every finance advisor advises not to increase your expenses more than your income and always try to reduce your expenses. In this, we can also reduce the cost of travelling, reduce the cost of house rent by relocating to a cheap place. We can also wash and iron our clothes in our house. We can take food from our house to our office rather  buying food. We can carry water bottle while travelling to avoid buying this. For clothes, choose the cheap market or weekly one of buy. Following this will save lots of money.

4. Save for yourself first 

Every person should set a side amount to pay for himself. This money can be used in emergency, after retirement or in medical.You may earn less or more, you should fix some amount in saving schemes, FD's or in any product which can be availed any time to get back

money.

5. Dedicate some amount for retirement 

For our smooth life, we should have some fund for retirement. We can make a SIP to get this amount in our retirement.

6. Minimize taxes

 We must learn how the income tax process works. We should also file income tax return.

7. Purchase health insurance

To avoid heavy cost of medical emergency seems difficult so we should by health insurance. Health insurance costs very less as premium but give us a lot of benefit along with very high amount of coverage.

8. Invest as mush as possible

 

Investing as much as possible. Investing even least amount every month can be a big amount in years. There are so many products available in which we can invest money like, in real estate, stock market, FD's, mutual fund gold, silver etc.

9. Review your financial plan. 

Over a period, we have to review our plan to check if it is still relevant to meet our financial goals.