Keys to Successfully Managing Personal Finances

Smart Ways To Manage Your Personal Finance%

Managing your personal finance is one of the difficult things to do. Yet, if you don’t manage it well you might fall into serious financial problems.

Establishing good financial habits is one of the best ways to keep track of your personal finance. If you haven’t already started now is the right time. When finances go out of hand it can lead to bankruptcy or not have enough money to save for the future.

Understanding Personal Finances

The first step to handling your personal finance is to understand what exactly it is. It can be defined as financial decisions taken by an individual for various purposes. These decisions and activities may include budgeting, saving, planning, insurance, loans, mortgages, emergency funds, retirement plans and so on.

Basically, it is everything that involves your money and others resources. Once you understand what your personal finance is you will be better able to handle it.

Things Involved in Managing Personal Finance

While there are plenty of things involved when it comes to managing your money, there are a few essential points that make up the majority of it.

  • Budgeting: This is one of the most important parts of handling your personal finances. It helps you keep track of your expenditure as well as keep everything under control. Setting a budget helps you take care of things that are important and eliminate unnecessary expenditure.
  • Buying Insurance: This is again an important part of managing your personal finances. Buying insurance keeps you protected from certain financial insecurities. This may include buying health insurance, life insurance, or car insurance.
  • Saving: Managing your personal finances without saving is impossible. Whether you are a student, professional, young or old, there is no good or bad time for starting a saving account. Start as early as you can. Save for retirement, for future and start an emergency fund.

How to Manage your Personal Finances Smartly

There are many ways to manage your money. Some are easy and quick while others might take a little time.

Save as much you can

This goes without saying that you should save the extra cash that you don’t need immediately. If you budget right you will surely save some at the end of the month. This money should go into your saving accounts like your retirement plan.

  • First take care of all the necessities like food, rent, debt payment, utilities etc.
  • Save every penny if you don’t need them for some essential things.

Beware of your debt

There are all kinds of debt. Some of the debts you need for things like buying a house or a car while others are unnecessary like your credit card debts. Make sure that you stay clear of the debts.

  • Say no to credit card debts. They are one of the major reasons why people have so much debt to pay. Credit cards are usually used to buy things that you don’t need.
  • Keep a good credit score by having no credit card debts, so that you have a healthy personal finance.

Spend your money wisely

This is easier said than done. When you have money it’s hard not to spend them on a few luxury items just to gratify your urges. The best way to handle this is to pretend you don’t have a lot of money even if you have some extra cash.

  • Look for cheaper deals even as you can afford the expensive items. This does not include settling for low-quality things, just find the right deal.
  • Make sure you grow your savings each month or whatever you have decided.
  • Create goals and stick to it to manage your personal finance more effectively.

Invest and grow

One of the best ways to grow your capital is to invest them in good schemes. It may sound a bit scary to invest your hard earned money in schemes you are not sure of, but that’s where your financial advisor can help you.

  • Start with a small investment and you will get a hang of it eventually and you will be able to make better investment decisions.
  • Look for mutual funds and stocks accounts where you can spend your money. Investing in them has proved to be very beneficial.

Shop wisely

Whether it’s the grocery or clothes, you can always find ways to spend money on them through various deals. With coupons and gift cards, you can avoid paying the full amount for them. You can look for similar deals when shopping online. Don’t compromise on things that are necessary.

  • Make use of the deals offered on special occasions like Christmas or Valentine’s Day. You can save money by buying things at discount prices.
  • Buy used products online to save money. When you can buy books and gadgets that are slightly used and save money.

These are some of the best and easiest ways you can handle your personal finance. Don’t worry if things don’t always go according to the plan. You can always adjust and improvise.

Take control of your personal finances from today.

Source: https://www.moneymanagementiq.com/smart-ways-to-manage-your-personal-finance/

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5 Effective Ways to Effortlessly Save Money

10 Easy and Effortless Ways to Save Money%

Saving money is a huge and painful task for many. No matter what they do, they simply cannot get around do saving more money. They desperately ask “how can I save money?” Depositing money into your saving account each month isn’t enough. For some people, they do not have money to save some in the first place.

Fortunately, there are some smarter ways to save money without giving up on your favourite things. If you are one of those people who are looking for simple and effortless ways to save money, here are some tips for you. Some may work for you and some may not. Read them anyway and tell someone who might benefit from them:

Delay that purchase

How can I save money when I need so many things? This is the question most people ask when it comes to saving money. Advertisements are so persuasive that you immediately want to buy that thing even if you don’t need it. This instant gratification is unfortunately the reality of the present time. So, all you need to do is delay buying things just because you want or feel the urge. Wait for a few days, week or even a month. After that if you still want it then go for it. It so happens that when you delay buying things you realise that you don’t need them. This realisation will help you save money on expensive buying.

DIYs

Sometimes DIYs can work wonders. Try making gifts at home instead of buying them from the store. There are plenty of cool videos online that will teach you to make gifts at home that too without spending money. You can make cookies or cards at home and make it personal so that the person you are gifting feels like you have made an effort. The next time you think”how can I save money on expensive gifts?” Think DIY.

Homemade foods are the best

Why eat all the junk outside when you can make simple and healthy food at home and feel just as great? Start packing your own lunch or cook dinner at home, and you will see a remarkable difference in just a few days. If you think you don’t have time you can do batch cooking for the whole week. This way you will not only stay healthy you will also save plenty of money.

Sell things online

There are plenty of things lying around in your home that you no longer need like your old clothes, books, CDs and DVDs, furniture, gadgets and other stuff. You can sell them online on websites like eBay that sell used products and earn some extra cash. Or you can barter them for other things you need with people who are selling things they don’t need.

Avoid Credit Card Debt

Paying debt is one of the painful tasks that people have to do when they don’t have money and use the credit card. Quit using the credit card for a while. The additional debt isn’t helping anyone. To remove the temptation, just leave the card at home when you are going out. One of the biggest reasons for the mounting debts for people is the credit card. It gives you the buying power, but it takes away so much more.

Buy online at cheaper deals

How can I save money on online shopping? One of the best things about shopping online is that you can compare rates and buy the same stuff at cheaper rates. Also, online stores are always offering things on sale and at discount prices. You can take advantage of the online offers and buy things you want at cheaper rates.

Cancel unused subscription and membership

With the automated deduction of money from their account people may forget they are spending money on unused subscriptions and memberships. If you have a gym membership but you barely go there, cancel it. Likewise, make a list of things that you have subscribed to like a magazine or TV channel and cancel them if you don’t use them often.

Put Up reminders

If you have the habit of forgetting how much money you owe on the debt, then you need to put on a visual reminder to help you remember things. A post-it note, a reminder from the app on your mobile, a visual board — any of these things can serve the purpose of reminding you about your impending debt.

Review before you buy

Before you buy that new clothes or shoes from the store make sure that you have gone through your closet. This will help you determine whether you really need new clothes or shoes. Often people forget how many clothes they have at home. Some of the clothing items may remain at the back of the closet unused for all those months.

Travel smart

One of the daily expenses for people is travelling. Try public transport for a change instead of taking your own car. This might help you save a few bucks on the gas money. You can carpool with your friends and family when going to the same destination. Travel smart and save money.

These are some of the easy tips that can help you address the question how I can save money. These are some of the simplest and effortless ways to cut down the cost and save money.

Source: https://www.moneymanagementiq.com/10-easy-and-effortless-ways-to-save-money/

4 Money Saving Tips for Your Business

4 Ways Small Businesses Can Save Money1

A small business is one that operates on a tiny budget. I have seen small business owners complaining about this. They tried to convince me that there’s hardly any financial leverage for them and it’s hard to operate with an inadequate budget.

I wasn’t convinced. I feel small businesses can grow multifold if they cut down on unwanted expenses. Owners should make it a point to lower operating expenses and identify the mistakes in their operation and management-level stratagem, due to which they are losing money. This article is a handy guide for them. So, those lurking here, keep reading.

Purchasing paid software

Digitization and automation are key to business success. Any business, regardless of their size, scale and the industry they belong, need to digitize their operation and introduce automation to eliminate errors.

Hence, it makes sense for a small business to purchase pricey software, right?

Wrong.

Purchasing licensed software is a thing of the past now, thanks to the availability of open source clones of paid software and secondly, cloud quickly becoming mainstream. You can even host webinars on Cloud. Look at Adobe. Photoshop, their most publicized product was downloadable and paid once. As soon as piracy reached its peak, Adobe made it accessible only via a cloud.

Small companies waste money by purchasing the software license. They’d have to buy the subsequent updates and worse, the software may be replaced by a new and more efficient army of software at a cheaper rate.

A combination of cloud and open source rocks for small businesses. They should only spend money for buying paid plugins of FOSS, not for buying the software itself.

Hiring full-time staff

This is another mistake, a number of small businesses have been making and cutting their chances of success by half. When you hire a full-time employee, you not only have to pay them a sizable amount but also retain them. Sacking them shortly after hiring could land you in legal problems and increase your attrition rate, which is not good for the long-term prospect of your business.

Crowdsourcing used to be popular. Now, it has given way to gig economy. It’s a cross between crowdsourcing and full-time freelancing. In gig economy, you hire a freelancer, but for a large project, rather for short-term work.

Gig employees are available everywhere. Find them and assign them the work that you would have assigned to a full-time employee had you hired them. The best thing about gig economy is you can tinker with it. For example, some businesses take a hybrid approach. They recruit in-house staff and have them handle large projects. But for minors works and quick fixes, hire gig professionals.

This way, they ensure the speedy delivery of the work, yet save money. If gig economy was not on your financial resolution list, add it now.

BYOD isn’t bad

BYOD is an acronym for bringing your own device. It is specifically for small firms. Large companies cannot risk internal data being accessed by third-party devices, so they are not open to BYOD. But small businesses don’t have a compartmentalized work atmosphere and in most cases, a flow of data within the organization is unrestricted.

The advantages of BYOD are so many to list up. First, they don’t have to purchase individual workstations. That’d save them a lot of cash. Second, they won’t have to ensure the machines as employees will bring their own. Two biggest advantage of BYOD is less strain on IT guys and employees bringing their own Wi-Fi devices.

Alongside benefits, there are some risks. While most of the risks are mitigable, having to buy cyber liability insurance could be a risk. It’s related to data privacy. The business pays the premium and if their data is stolen, they are reimbursed by the insurance company. This type of insurance is offbeat and technical clarifications are often hard to get.

Expensive marketing strategies

Small business owners tend to forget that they cannot adopt the same set of marketing strategies, normally adopted by large businesses. They unnecessarily spend so much money on marketing but end up getting little to no result.

For example, cracking AdWords requires a considerably high budget. Competitive keywords are pricey. And even if they get clicks, turning leads into sales requires a lot of effort and money.

The problem of running a small business is you can’t experiment too much with marketing and advertising because you can’t risk losing money. Hence, the window period for ROI tracking should be as short as it gets. For example, if you are spending on AdWords, but not getting the desired ROI, stop the campaign and invest the money in other platforms.

As a small business, you have to be very dynamic with the marketing strategies you employ and switch between productive strategies. If you are not doing it, you are making a mistake.

Source : https://www.moneymanagementiq.com/4-ways-small-businesses-can-save-money/

How your Emergency Fund Protects you in Difficult Situations

Emergency Savings Fund & Where It Helps You.png

Having an emergency fund has many benefits. It is not the same as having a saving account. As the name suggests, the fund is for various emergency situations that life may throw at you. The fund will keep you covered financially and help you get through the tough time.

Even a $1000 emergency saving fund can help you with various financial emergencies. The best things about saving for this type of fund is you can save as much as you want. There are various ways you can add to your fund and make it bigger over the time. If you don’t get to use it before retirement, this fund can add extra weight to your retirement savings.

Here are some of the financial situations where an emergency fund can come handy:

Losing your job

This is the biggest and most important reasons why people have emergency saving accounts. Losing a job can have a very adverse effect on your life. There are so many things that depend on your monthly paycheque — rent, food, car, electricity bills and so many other things. When you lose your job the backup fund will help you get through the tough time. The fund will take care of your basic needs for at least six months which is enough time for finding another job and getting your footing back in life.

Unexpected Health Emergency

Whether you had an accident, or a major surgery is needed or you are on a long medical treatment, an emergency fund will help in this kind of situations. Health care expenses are one of the important emergency situations that can put a serious stress on your finances. It is important to have a backup plan for your health emergencies.

Even if you have health care policy, you will still need to pay the deductable and excess amount that your policy doesn’t cover. You don’t want to get stuck at this stage. Your Emergency fund will help you cover those healthcare expenses.

Major Home Repairs

Home repair work is very important. Whether your house got damaged due to natural disasters, or accident like fire or you have something that needs repair work immediately, your insurance will not be enough to cover the entire cost. The insurance doesn’t provide full coverage either. You still may have to pay the deductibles and sometimes the repair work may not qualify for the insurance coverage. This is where your emergency fund will come to your rescue. You can pay the amount needed immediately and keep your home in great condition.

Unexpected Tax Bill

Just because the last time you got tax refund it doesn’t mean it will happen all the time. With so much going on in life keeping track of expenses may not be easy especially when you are paying high interest debts. Paying tax is important and you don’t want to be on the list defaulters. Having an emergency fund will come to your aid in situations like this. This is one of those emergency situations that you have no control over and may need some extra money to cover the expense.

Likewise, there are plenty of bills that can surprise you at any point — electricity bill, phone bills, internet bills and others. This backup fund will help you pay off the bill and stay on the safe side.

Unexpected Travelling Expenses

You never know when you may have to travel unexpectedly. Unexpected travelling may include death in the family, an emergency situation, surprise wedding, or any other important thing that may need compulsory travelling. You don’t want to put unnecessary burden on your credit card or add up to your debts that you already have. An emergency fund will provide you with the money you need to travel anywhere you have to. This will not put any strain your other saving accounts.

Other unexpected Financial situations

There are other smaller financial expenses that your emergency fund can cover like car repair, emergency dental surgery, buying an expensive gift, minor accidents, and many other. There are no fixed number of situations where you may need to spend money on. For those little hiccups in your life, this emergency fund will help you get through.

How to save for an emergency fund

Saving for the emergency saving fund doesn’t have to be so serous like your retirement savings. You can add to your fund with every little saving you can:

  • Save every month. Start small and gradually build up your fund
  • Save those loose change and cash you didn’t spend that day
  • Opt for DIYs gifts rather than buy it and save that money in your fund.
  • Sell your old things that you don’t use online and earn that extra cash
  • Cut back on unnecessary expenses like the number of coffee you buy in a day. You can make them at home as well

Start building your emergency fund.

Source : https://www.moneymanagementiq.com/how-your-emergency-fund-protects-you-in-difficult-situations/

retirement-plan-now

Financial management is not a onetime responsibility. It is a continuous process that starts at adulthood and continues till your retirement and beyond as well. The way you manage your finances has a great impact on your retirement savings.

According to the National Institute on Retirement Security, nearly 45% of the working-age household do not have a retirement account or plan and more than 60% of the working households with retirees have less than one times their annual income. This data is scary since you need your money to make your retirement more comfortable.

But, having a retirement plan does not guarantee an enjoyable retirement time unless you make the right financial decisions.

Here are the financial milestones you need to reach before you retire:

Start Creating Healthy Financial Habits By 25

This is the perfect age to begin your savings for the future. Create healthy saving habits and save as much as you can. Put the money towards emergency funds and health care. This is the time when you take more risk and switch jobs. Having an emergency fund gives you protection against any unexpected expenses that may come your way. In case you lose a job or quit your job, an emergency fund will cover your expenses for at least six months.

This is also a great time to start your retirement plan so that you can gradually build up the saving for that perfect retirement time.

Start paying off your debts by the age of 30

By 30 you have an idea what life is going to be after this. Soon, you will marry, have kids, buy a house, buy a car and have lot more responsibilities by the time you hit 40. At this time you need to make some major financial decisions:

  • This is the time you start paying off your student loans and other debts including your credit card debts.
  • Get a life insurance and make a will to make it easier for your family. It is a great way to provide your family protection in case something happens to you.
  • Increase the percentage of the money you are saving in the retirement fund. By 30 you are settled in your job and save more money comparatively. So it’s only reasonable that you put more money towards your retirement fund.

Take care of your mortgages between the age of 40 and 50

By the time you reach the age of 40, you should be more comfortable financially now that your student loans are paid and your kids going off to college or starting on their own.

  • Try to pay off your mortgages. After the retirement, you will feel financial stress. Paying off the mortgages by the time you reach 50 or 55 is good news.
  • Clear all the credit card debts you have before you retire. Retiring with debts hanging over your head is not a great idea. You should start paying off your debts way before reaching 40 so that you can easily reach the financial milestones before you retire.

Increase the retirement savings to the maximum

Since you never know how much you are going to need for your retirement, it is imperative to save more as your age progresses. If you are planning to retire in your sixties then you should plan on saving for 25 years of retirement life.

  • You will need 80% of your annual pre-retirement income to live comfortably when you retire. You will need to increase the amount of money you are saving for your retirement as the time passes.
  • Plan ahead and calculate how many years of retirement you need to save for. Your health condition will determine the years you want to plan for.

When you reach your 60’s

This is the time you need to fine-tune your financial goals. Now that you have saved so much and almost on the finishing line before you retire, you need to narrow down your goals. Seeking the help of a professional financial expert will help you establish a strong retirement goal.

  • You may need to cut down on costs and save even more for the retirement.
  • Make significant changes in your lifestyle, expenditure, and other activities that directly impact your retirement savings.
  • Review your will and life insurance to make sure they are in tune with your current financial situations.
  • Look for long-term care insurance and other schemes if you are married. This will help take care of your health and living needs at an advanced age in case you are incapable of taking care of yourself or have no one to take that responsibility.

These are the 5 important financial milestones that you need to reach before you retire. But, if you have already missed a few of them, it does not matter. You can start saving anytime you want. Have a plan for your retirement life and adjust your financial goals accordingly so that you can have a great retirement time.

Source: https://www.moneymanagementiq.com/