Planning and maintaining personal finance is one of the important aspects of life. You can save money and even earn more by investing if you keep track of your expenses and maintain them.
People think it is tough to maintain our expenses list and track it. It’s a digital world and there are lots of apps to maintain your expenses, some apps may even help you to save money by providing gift cards and cashback offers. Do I need to spend a lot of time? No, once you are set, it just takes an hour to two a week to look into your income and expenses and maintain them.
Here we list 4 important steps in maintaining your personal finance.
Budgeting is one of the important aspects of maintaining personal finance. Whether you are living paycheck to paycheck or running a successful business, it is important to come up with a budget plan to track and maintain your expenses.
Having a good budget plan can help you to see where you are spending money and how much you are spending. This will help you to keep track and cut unwanted expenses.
By cutting the unwanted expenses, you can save money and in turn, you can use it for other expenses and savings.
You could also use it to invest in your business or invest in mutual funds.
The most common mistake people make is, they ignore small expenses on their budgeting like parking tickets, giving tips on restaurants, etc. It is important to make note of event penny you spend. In this way, you can keep track of unwanted expenses and help you to cut those expenses.
It is also important to keep track of your expenses once a week, this will help you to plan for important events that come in the near future. If you need money, you can plan in advance. So it will be beneficial to you if you need more, you can have more time to arrange.
There are lots of google sheets templates and microsoft excel templates online. You can download them for free and maintain it. These apps will also give you offers and coupon codes which will help you to save money.
Planning is where most people make mistakes when it comes to personal finance. People don’t spend time to plan on income and expenses and as a result, they end up getting loans on the property, etc.
This in turn will make a huge burden in the long run and can make things worse.
so it is important to have a plan for personal finance. Planning includes documenting the amount of money you and the amount you spend in a month right from phone bills, electricity bills, loans, restaurants, travel, etc.
Once you have things documented it will be easy to analyze and plan. Try to cut out things that are nonessential. For many, this may look odd now, but when you document every penny on your budget sheet, you can see how many unwanted expenses you are making in a month.
You have documented and devised a plan for your personal finance, it is now time to save money.
Saving money can be done in several ways by cutting out expenses, buy products that are cheaper than overpriced products, claiming free money online, saving on your expenses on grocery stores, etc.
There are several ways you can save and get free money online. One the best method is to use apps and websites which track your purchases and provide discounts. There are lots of apps online that help you to shop and credit rewards points. You can use these reward points for cashback or you can get gift cards.
Another interesting way to save money is to use coupon codes. In major websites like amazon, you use a trick to get coupon codes. Say you want to buy an item and you go to their website and search the item, read reviews and when you are happy to buy the item, add the item to the cart and then close the window.
The website algorithm will think that you are just a step away from the purchase but didn’t buy it. So you will receive a coupon code for the same item in 24 hours. This works for commercial websites like amazon, flight bookings, and travel websites. I have received several coupons like this for various subscription channels and new purchases.
Another way to save money is to make your purchases on offer days, major commercial websites are carrying out offers frequently at least once in three months. When you want to put items like toothpaste, you can use the opportunity and wait for a month or two and make a building purchase. This will save a lot of money on your groceries and household items.
Try for bulk purchases on items that you can use for a long time. Bulk purchases often result in saving money and it could also reduce your workload on purchases.
When you have listed out the unwanted expenses, you may want to stop them, but in the beginning, it will be difficult. All you need to focus is on momentum, you don’t need to change in a day, but you can try to reduce your step by step. This will help you reduce the urge and can help you to save a lot of money.
Investing is one of the important aspects of maintaining personal finance. When you keep the money in a saving account for a long time its value will go down. So one of the important steps is to invest.
There are several types of investment like stocks, bonds, bank products, mutual funds, etc.
The best way to start investing is to start learning. When you are interested to learn, there are a lot of free resources available online right from youtube videos to free ebooks. The first thing to learn in investing is terminology.
Start from the basics and once you have enough knowledge about the basic concept you can start investing in small amounts. The most important thing to note is, you should not start with a huge amount and you should not invest all your savings. It is best to start with 10% of your savings. This will help you to learn how investing works and you can get used to the flip flop game.
Once you have enough knowledge about investing, you can start investing more. Again I would advise you not to invest huge amounts or full of your savings amount. You can try with 30% to 50%. You could ask me what is the best way to invest a huge amount when you feel a stock’s value is going to go up and if you have enough knowledge and evidence then you can invest a huge amount.
One could see lots of crypto millionaires in the last two years, most of them had savings from day to day jobs and have invested them wisely in crypto. When you have the saving money attitude and if you can maintain and track your expenses, you can earn a lot by investing at the right time. Things would be better if teens are taught to maintain personal finance at the school level.