Personal finance 



Personal financial planning is a vital thing if you not do financial planning timely than you can’t achieve financial freedom , In generally a middle class man don’t aware about this type of thing like investment, saving, money management .....

Today i am going to tell you how to manage your personal finance and make investment so that your money became safe and secure for future.

Personal finance is all about household financial activity including budgeting, saving, investing, debt management and planning for future financial goals.

·         Categories your current Financial Situation

·         Create a budget

·         Emergency fund

·         Pay off High-Interest Debt

·         Start saving and Investing

·         Insurance

·         Plane for Major Expenses

·         Tax advise

 

Categories your current Financial Situation
 

·         Income: - Identify all sources of income, salary, business earning, investment, etc.

·         Expenses: - Track monthly expenses like rent, mortgage, utility, groceries, transportation, Insurance, etc.

·         Debt:- Make a list of existing list to high interest debt to low interest debt

·         Assets: - Record valuable assets like House, Car, Saving, Investments.

After doing this you have to go Point number two

Create a budget

Budgeting is a very important part of financial planning so we make it wisely

Now we use a Famous Strategy   50 30 20 Rule

It’s a simple and effective budgeting Strategy that divides your income into 3 key categories: Needs, Wants and saving and Debt repay.

In this strategy 50 means 50% for needs, this category covers all the essentials that are necessary for your daily living. That is non-negotiable expenses that you cannot live without.

And 30 means 30% of your income spent on lifestyle choices, Entertainment and things you desire but not necessary for survive.

And last 20 means 20% of your income for saving this part of your income help you in future financial unstable situation.

Emergency fund

Set aside 3 to 6 moth of living expenses in a liquid saving account. This fund covers your unexpected situation. Suppose you loss you job in that case you at list survive 3 to 6 month easily so that you find a new job and continue your life and emergency fund also cover your emergency situation suppose you need an amount of money in urgently in that situation you emergency fund can help you.

Pay off High-Interest Debt

If you have some debt than make a list accordingly interest rate of debt and pay high interest debt first than pay lower interest debt doing this you save some money.

Focus on paying off credit card balance high interest loans first, aim to reduce debt and pay existing debt by automating payment so that debt pay early and you must be debt free.

Start saving and investing

Make retirement plans is so important contribute to retirement account like 401(K) or IRA. Start early to benefit from compound growth.

Invest in assets, Invest in mutual fund, stock market, Govt. bond for secure investing, to grow over the time and diversify your investment to minimize risk.

Tax advantage Account use account that offer tax benefits, like health saving Account (HAS) or Flexible saving account (FSA).

Insurance

Insurance give safety and security to you and your family, everyone must do a Life Insurance, Family Health insurance.   Health insurance give a security of expense when you or your any family member was sick and some deses hospital bill will very high in that case Insurance Company pay the bill.

Plane for Major Expenses

Major Expense like you wants to buy a home or a car, save money for major expenses makes sip monthly for save money a long time and buy it finally.

 

Tax planning

Plan your tax properly if any  issue consult a C.A  or tax advisor for proper tax planning and deduction of tax, it return and understand tax properly.