9 Principles Of Personal Finance To Live By | Money In Minutes

1. 9 PRINCIPLES OF PERSONAL FINANCE TO LIVE BY When it is about personal finance, there is a lot that we should know in order to better prioritize and manage the funds. With the presence of multiple sets of incomes and endless expenses, the financial lives of individuals have turned really complex. Such a situation calls for abiding by certain principles to avoid financial challenges in the future. Here are the personal finance principles you ought to apply in your life: 1. Track net worth Net worth is considered the best indicator for ascertaining the financial health of an individual. By tracking your net worth you can take a better charge of your financial progress and even look for ways of improving it. Indeed, you always have the option of availing a personal loan from private finance in Delhi, but when you have your net worth in clear numbers you can plan your expenses accordingly. 2. Risk and return There are few who earn and keep the money in savings, which probably makes them earn peanuts over a period of time. As a prudent individual, one must invest funds in high return avenues that help the money to grow over a period of time. It is said that' Higher the risk, better are the returns'; but investment should be done in accordance with the risk taking capacity of the individual. 3. Spend less than earnings This is considered the fundamental rule for personal finance. When you spend less than what you earn, you can save a considerable chunk of funds for your later years for ensuring your survival. In the absence of considerable savings, you need to take a short term personal loan in order to meet the big financial goals. 4. Start saving when you are young If you think your young age is all about spending lavishly, then you are certainly wrong. Always recognize the fact that savings are a product of the interest earned which depends upon the time period for which the investment was done. Thus when you start saving from a young age, you need not avail an instant loan online for making big purchases; your savings can do the needful. 5. Maximize the income Rather than pinching pennies, one should think about increasing income as the best method for increasing savings. This is because the amount one can save by reducing the expenses is always a limited

2. thing. The financial cuts are not a forever thing. You will always be better off if you look for ways for making more money. This can be done by negotiating a raise, finding a high paying job, starting a side business, or doing some freelance things. 6. Choosing the repayment tenure In case you need to get an emergency personal loan, you need to equally weigh the repayment tenure while looking at the features of the loan product. The ignorant behavior at this stage leads to difficulties in paying the monthly installments when the repayment period begins. This leads to personal finance issues as one may be compelled to put savings for covering the loan EMIs. So, never commit this mistake and always choose the repayment tenure with utmost care. 7. Budget living Budgeting has a great impact on finances. When individuals live paycheck to paycheck, the average credit card debt gets carried over from month to month compelling them to avail mo for repaying the same. But when you have budget implementation as a regular practice in money management, you can make money work for you instead of the other way round. 8. Avoid putting all eggs in one basket Since there is never a guarantee as to which asset class will fair well in comparison to others, it is always a recommendation to put the investible surplus across asset classes which include bonds, debts, gold, equity, etc. Again the investment distribution depends upon the risk appetite of the individual investor. 9. Building an emergency fund There is no shying from the fact that money is a great trouble solver for the challenges life imposes. Thus building an emergency fund by setting a weekly, monthly, or quarterly money transfer to savings helps in building a fund that can be used when emergency beckons. Every individual has a unique interpretation when it comes to financial goals and their related challenges, which leads to the need of having personalized financial planning. The above principles can indeed help you plan better. Original Source: https://blog.moneyinminutes.in/9-principles-of-personal-finance-to-live-by/