Handling Personal Finance || The better Way
Few small yet important things when done right with personal financing can work wonders for you.
By AKSHAY IYER
- Keeping Things “Super Simple” – We complicate things in life for no reason what-so-ever. Now keeping things simple doesn’t mean, you’ve to do everything from one account (That’s not wise). You should actually keep separate accounts for separate purposes (Ex – One account for expenses, one for trading, one salary account, one for savings, etc etc)
- Don’t let your future self take care of your current situation – Do you ever tell yourself that it’s okay to make a bad spending decision right now because you’ll earn more money down the road? That’s a giant mistake, one you’ll almost always regret for a long, long time. Sure, your future self might have more income, but it’s also fairly likely that your future self might have less income and you’ll find yourself in a really bad situation. Even if your future self is doing well, there are probably going to be other big expenses that you’ll want to deal with at that time, like buying a house.
- Eliminate “High Interest Debt” – Keep your emergency fund of 6-12 months (As per your comfort zone) and keep ticking off the high-interest debt and plan your debt reconstruction.
- Buying a Term Life Insurance is Super Important – Get a term insurance and become free from worry of how your dependents would be taken care of when you’re not around. At least it’ll give them some freeway and time to re-think and re-frame their life.
- After term Insurance comes Medical and health Insurance – Now this would not just be for you, but for a family altogether. A family medical cover might cost you more than individual ones (Considering the age and other factors) but that blanket insurance goes a long way. Also, you can keep separate insurance too on the side for a small amount.
- Take CONTROL of your Finances – It is not the consultants, tax planners, your friends or others who will look it for you. This step to financial freedom should first be taken by you, given proper thought to and then they would come into picture as to how you can do it more effectively. First take control yourself, then the rest will follow.
- Calculate your work on “Per Hour” basis – What this would do is, this would put your hard work to perspective. You should definitely work 10X harder, but the per hour calculation would make you re-think on the efforts you put in and the result you get.
- Have HUGE Goals- I can’t emphasize more on this. Like, you should have goals that makes you feel uncomfortable and then you should re-frame it and think on how you can achieve it. Even if you miss that goal, you’ll be in a position better than you thought of.
“Personal Finance is easy and totally controllable, just don’t let it take over you, rather make it work for you”
Jo bhi apke “Personal Finance” goals ho, use achieve karna aur exceed karna should be the motive.
Prioritization Factors :
Will Power
1
%
The most important factor is “Willingness to control your finances”.
Allocation & Portfolio
1
%
How well are you organized with your finances plays a crucial role too.
Other Related Factors
1
%
Don’t go by how others are doing it, test it for yourself and workout a plan.
Half Time Progress bar
Check each quarter how your financial planning is working for you.
You should be In Line with your goals
60%
Emergency Fund
10%
Investments and Savings
50%
All the expenses put together
40%
What's your Financial Planning Criteria?
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