Are you planning to reach your goals? Identifying strategies to plan your personal finance? We will help you in your financial journey. In fact, financial planning is a golden gate to achieve your short and long term financial goals. Personal finance planning strategies help you to design an accurate plan to make those goals come true.
Ten Personal Finance Planning Strategies:
Budget Your Money–
It is tough to manage money. A reasonable budget helps you in planning your personal finance. It gives you ideas about priority expenditure and saving enough to meet future goals. The general practice of budgeting is a fifty-thirty-twenty percentage of your total income. Fifty percentages is a slot for your daily need including grocery, bills, rent, and travel like things. Thirty percentages are for your family-social life as in exploring new places, restaurant and family dining, etc. The rest is for savings and emergency payments.
Emergency fund can be managed wither every month or once every three months. It is always considered as good saving. You can use emergency fund for anything if unused for a while. But remember that you should not stop investing in or keeping aside your emergency fund.
Do Not Spend More Than You Earn–
To limit your debt and expenditure does not mean living a lower status life. If you observe well, we as a human tendency to spend on the repetitive things unnecessarily. You can pay on things which are your need. Savings never go waste. At least spend in such places which in return gives you assured income or say doubles your investment, e.g., property at an ideal location, house, office, an educational course, etc.
Limit Your Credit Card Use–
If the credit card used wisely, it is the best budgeting tool to manage your personal finance. Remember the credit card is the biggest debt trap. Before you swipe it keep in mind that soon you have to repay and overdue will charge you fine. It is most beneficial in a medical emergency. And terrible if used for regular shopping and dining. So it is advisable to have not more than two credit cards. And you should have control over its use.
Invest In Mutual Funds, Government Schemes, And Bonds-
It is well said that well-directed money is a boon in every financial emergency. You can plan your personal finance by investing some percentage of your earnings in mutual funds and such other schemes. It is true that if invested for the long term you get good returns. This type of investment is beneficial to achieve long term financial goals. By investing in schemes and funds, you also support industries and nation in the journey of development. You play the role of a loyal citizen.
Tax Breaks Maximization–
It is almost in every developed country that tax code is very complicated. Due to the tiresome tax system, a massive amount of money people keeps lying over the table for years and years. By tax breaks maximization you can free some of the money and use it at a better place. It helps you in reducing the amount you are actually taxed by the government.
Save For Life After Retirement-
Nobody retires ever. When it is related to financial planning ‘after retirement,’ then one must think about it. Old age needs a lot of money than any phase of life if you are not healthy enough. So, a good investment for retirement if one start the early age of earning life, it always pays better later at life. Many financial advisors suggest the retirement investment with compounding interest. A good retirement investment minimizes your financial burden of income tax. A good wait provides good returns.
Pay Off Loans As Soon As Possible-
If you are paying high-interest rates for your personal loan or say education loan, then it is better to pay principal amount faster. Another option is federal flexible repayment programs like ‘graduated or extended repayments,’ which can save some of your dollars for sure.
Your life is as important as your interest in understanding the strategies to plan your personal finance. We all insure the car, auto as we find them dearer than family or one’s own life. To invest in a good insurance scheme and to review periodically to ensure whether it meets your family needs is the best gift to yourself and family. An investment in insurance not only helps in financially but also supports morally and psychologically in critical medical conditions. It saves time and efforts. Insurance is the best investment and expression to show how much you care for your family.
First thing to remember that do not pay late bills and ruin your credit score. A proper and constant credit score helps in almost any type of financing.
The right personal financial strategy helps you to keep your expenditure and savings in balance. It makes sure that your money is on the right track. The financial plan guides you in three crucial financial principles, i.e., Priority, Assessment, and Restraint. The financial strategy helps you to be successful in your financial goals related to your career, business, and family.