Now that the year 2020 has started, let’s begin making resolution to improve for finance. But yes, it isn’t important to start a resolution only at the beginning of the year. Changes and chances can be taken anytime of the year! Irrespective of when we begin, basic tips remain the same.
Financial planning is crucial because it helps in managing the sources of income and expenses and helps in establishing a budget.
- Be frugal
Get paid for the work you do and before spending your hard earned money think twice. Do a thorough analysis of the payment you get for the work you do. If you are underpaid even by little money, there would be difference in cumulative amount.
No matter how much you earn, if you spend more than required, you will never be able to save money. It is easy to spend less than trying to earn more. A little cost cutting effort where were possible can result in big savings.
- Budget planning
Understand where your money is used. Set plans on the spending and savings – Make a daily, weekly, monthly and yearly planner. Budget planning is very important step of financial management.
- Managing credit card
Credit card debt is the first obstacle to getting ahead financially in this modern era. It has become so convenient to use the credit card anywhere and everywhere that we don’t realize that it is our hard earned money we are spending, small or big.
In reality we think of clearly the credit card debt quickly but end up carrying it forward and the result – we pay far more for the things that we would have actually paid less if we had used cash.
- Retirement planning
It a very important to save atleast 15% of our earning towards retirement plan. Make your retirement more enjoyable ensure to have a retirement plan to have a better lifestyle and also to protect the you have worked hard to acquire.
- Have a savings plan
As the saying goes – save before spending – if you wait to save after meeting all your expenditure, you might end up with no money left for savings.
Have atleast 20% of your money saved before even paying the bills. The best is to have the money automatically deducted from the paycheck to an account where you will not be able to access it for a certain period of time. That way we would have bulk amount once the plan matures.
- Investments
Even after the retirement plans and saving plans, if you can still manage to do some investment, do it. It saves from unnecessary spending.
- Utilize the employment benefits
Under the employment benefits such as medical insurance or any financial benefits that can be available monthly or yearly. Take the advantage of any benefits that could save money by reducing taxes or out of the pocket expenses.
- Insurance coverage
It is very important to have enough insurance coverage to protect your dependents and your investments in case of any misfortunes.
- Credit score
Maintaining a good credit score is important. This is because based on the credit scores, any institution like bank or even a retail store will grant its services to you.