8 Tips for Better Personal Finance Management

8 Tips for Better Personal Finance Management

Finance is the concern for everybody, especially for those with limited income and big dreams. But it takes well planned personal finance management to become successful in achieving financial security. I have searched on this subject and come up with some financial health tips which will help you manage your money and control your expenses. Here they are:

1. Set goals for personal finance

Decide what you want within a time frame. It can be anything like own house, starting a new business, car, foreign tour, world tour or even a bank balance. Making financial goals will help you focus on your efforts and will make it easier to achieve.

2. Make savings automatic

You can opt for daily or monthly saving plans. You can also set monthly money transfer to your saving account using online fund transfer facility of net banking. Start with a small amount. This is a good way to become financially rich.

3. Create a spending plan

Make a budget for each of the three major expense categories, i.e. food, housing, and transportation. The fourth is the miscellaneous expenses i.e. entertainment, buying luxury items and other expenses. Create an annual budget for these categories and review it on a regular time interval. This will help you make adjustments when needed, find and avoid unnecessary expenses and create better personal finance plan and budget for the next year.

4. Remove unnecessary expenses

Unnecessary expenses may be taking a large chunk of your income. Evaluate your monthly expenses to find out those which can be avoided. Avoid bad habits like alcohol, smoking or anything which waste your money for no benefit in return. You may also have to spend large amounts on health issues later due to bad habits. Avoid Eating out frequently and make good and tasty foods at home. It will not only save your money but will avoid health issues and resulting costs in the future.

Resist retailers’ enticements like rewards cards, discount coupons, sale, discount on extra purchase etc. They are the tricks to get you to spend money. Spend on a thing only if you really need it. Use public transport or share the vehicle with your friend or colleague to go to your workplace and save fuel costs.

5. Avoid and eliminate debt

By avoiding the debt, you will be saving money which you would otherwise pay as the interest. If you have credit cards, personal loans, or other such debt, you need to have a personal finance plan to pay them back as soon as possible.

6. Make yourself and your family secure

You must save for an emergency fund so that if anything unexpected happens, you have the money. If you have a spouse and/or dependents, you should definitely get a life and health insurance.

7. Use expense management system

Use accounting software on your computer or use any of good personal finance apps for expense management on your mobile to keep track of your expenses easily. Such applications provide you the option to set recurring income and expenses and will save your time.

8. Increase your net worth

Reduce the debt, avoid unnecessary expenses and add extra income sources to increase your net worth. Add new skills which can be helpful in increasing your income. This will make you feel great in the long term.

Hope these tips will help you in managing your personal finance in a better way. Share your comments and thoughts in the comment box below.

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