@internetofvalue
2 years ago

What are some of the must have lessons for personal finance management?

According to you, what are some good rules to follow when it comes to personal finance management?
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Personal finance is all about discipline and consistency. Follow the below steps and prevent yourself from going into the downward spiral of reckless expenditure and credit default.

  1. Always prefer spending via card over cash. This helps in keeping a log where you are spending and helps in retrospective
  2. Open a fixed recurring deposit scheme. This can be anything like a recurring deposit of bank, or a mutual fund SIP etc. but it is very essential to park a fixed amount per month to provide a shade in your raining phase.
  3. Divide your expenses in different buckets like Health, Shopping, Entertainment and allot percentages more on health bucket items
  4. Don't spend using your credit card for anything other than grocery or utility bills
  5. Save at least 30% of your monthly income
  6. Keep your savings invested in multiple places like bank deposits, mutual funds, PF, long-term company stocks etc.
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Before trying to make any budgets, just make a list of everything you spend money on for a month. Do it again for a month making some minor tweaks....I guarantee you will spend less!

Jumping from 0 to 100 with an excel spreadsheet budget simply won't work.
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  1. Spend less than you earn.
  2. Put atleast 20% of your earnings into savings.
  3. Compound your capital through informed investments.
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Just keep a little money of your salary,even how much small it is,the important is every salary there's should be a budget for a saving,not just all in expenses
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First, your discipline to manage your money must be intact.
Second, do not buy unnecessary things, only the basic ones.
Third, save portion of your income regularly at least 30%.
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When it comes to personal finance management, I think the most important thing to consider is to really understand your 'WANTS' and your 'NEEDS'. Financial management requires strong self-discipline and attitude towards 'Spending' money. Having these characterictics will help manage personal finances well.
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Personal finance  is a term that covers managing your money and saving and investing. It encompasses budgeting, banking, insurance, mortgages, investments, retirement planning, and tax and estate planning
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The first and the most important rule to follow is DISCIPLINE! You may have read all the self-help books on finance, watched all the videos about personal finance management, but if you lack the discipline, everything you learned will just become useless.
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Personal finance is all about discipline and consistency. Follow the below steps and prevent yourself from going into the downward spiral of reckless expenditure and credit default.
  1. Always prefer spending via card over cash. This helps in keeping a log where you are spending and helps in retrospective
  2. Open a fixed recurring deposit scheme. This can be anything like a recurring deposit of bank, or a mutual fund SIP etc. but it is very essential to park a fixed amount per month to provide a shade in your raining phase.
  3. Divide your expenses in different buckets like Health, Shopping, Entertainment and allot percentages more on health bucket items
  4. Don't spend using your credit card for anything other than grocery or utility bills
  5. Save at least 30% of your monthly income
  6. Keep your savings invested in multiple places like bank deposits, mutual funds, PF, long-term company stocks etc.
reaction.
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Important Financial Lesson should be Learn: 1. Set Clear Financial Goals
If you don’t have a set destination to work towards it can be hard to find the passion or drive to save. Whether it’s a house you’ve been eyeing on your retirement carefully defining these goals and figuring out how much you’ll need to save can help you craft a plan for getting there.

2. Start as Soon as You Can This process allows the interest on your savings to earn even more interest. The sooner you start to save for retirement, the more time your money has to grow and take advantage of compound interest. Time really is a powerful lead for your investments so waiting just a few years to start saving may significantly reduce the size of your retirement

3. Spend Less Than You Make It’s incredibly easy in this consumer-driven world to live beyond our means but a good rule of thumb is to try and save at least 15 percent of your income. If you find it easy to overspend try paying for things like clothes and groceries with cash instead of a credit or debit card.
4. Create a Budget: Creating a budget can be as easy as adding up all your expenses for the month and subtracting that amount from your total income. and spend a little some days than others but if you have a budget in place or set a daily spending limit you’ll be able to adjust and make up for any oversights another day.

All you really need to do is work on building a solid plan that you will commit to and stick with over the years.
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