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Managing Personal Finance

Personal Financing is the tactic which is used by an individual in order to achieve his/her Financial goals. Financial goals can vary , depending upon person to person. Someone’s expenditure is always the income for the other one. Basic Financial Planning includes that a person should be able to manage his/her expenditure, with the limited salary and undertake the steps to save as well. Savings is essential and indispensable part of Financial Planning. Three key character traits can help the one to avoid innumerable mistakes in managing personal finances: discipline, a sense of timing, and emotional detachment. Some of the financial planning ways are given as follows:-

• Devise a Budget

Devising the budget is a renowned practice which is undertaken by whole nation. It helps to manage the funds for the country’s economy. Likewise, one can prepare his/her own budget in order to attain financial growth.There is no one way to plan the budget but here is one of those ways-

• Maintaining the ratio of 50-30-20

• 50% of the income is allocated to basic essentials.
• 30% of income is allocated to maintain one’s lifestyle
• 20% of the income is allocated to Savings, which is the most crucial strata.

• Create an Emergency Fund

Always prepare a safety net of the funds in order to meet any unforeseencircumstances. This fund is basically the contingency fund which will ensure that any situation like maybe Corona Lockdown, where many didn’t received any salary or suffered huge cut downs, one maybe able to stay on the brim of Financial Pool.

• Limit Loans/Borrowings

Always remember to keep your borrowings in check. Borrow only that amount, which you are capable to pay off. Never take loans beyond the repayment capacity. Usage of Credit Cards should be under the criteria of the available amount.

Using a Debit Cardwill ensure that amount is spent within the limits.

• Monitor Your Credit Score

Your financial steps taken are rated by your banks. Your habit of borrowing and the course of repayment is monitored, in order to get Credit Ratings. Always try to maintain high credit ratings in order to secure funds as and when needed.

• Consider Your Family

Always remember to ensure the maximum level of satisfaction for the family as well. Try to manage your funds and allocate them in such strata, where everyone is able to retain pleasure.

• Pay Off Loans As Early As Possible

The loans and borrowings taken are charged with interests. The more the time you take to repay, the more you pay the interests. So plan your funds accordingly to minimise interest payments on your borrowings.

• Pay Your Taxes Well In Time

Along with management of funds, remember to pay your taxes well in time. If taxes are accumulated, Income Tax department may raid and force you to pay all your accumulated taxes together along with uncanny fine amount.

• Leisure Fund

Try to maintain a fund which will help you to take a break from your busy life and relaxes your mind. Make peace with your never ending stress and always try to remain calm.

• Invest Smartly

There are n no. of schemes where one can invest their extra funds. Depending upon the lock-in period and returns, go for various investment tactics. Some of them are buying insurance policies, mutual funds and share market, buying of property and many more.

·Plan and Save for Retirement

Always remember to undertake those necessary steps which will plan your healthy retirement. Irrespective of how young you are, always try to maintain good allocation of funds for the phase, where one may lose earnings.