10 Tips for Effective Personal Finance Management

Creating wealth is difficult. Managing wealth and holding on to it is even harder. That is why financial literacy and skills need to be incorporated. Some habits and choices will help you create, manage, and increase your wealth over the long term. Tips from financial pundits and knowledge taught in financial literacy programs often become the stepping stones to success and financial stability. If you can succeed at personal wealth management, you can guide others including your children. This way, you can promote future financial health.

Cashco is made for the real world

Cashco treats clients as our friends and family. We will sit down with you and discuss your financial issues and go over documents together. We aim to empower you and provide you with the best services. Money is an important factor in the quality of life one can afford and is an important vehicle that drives growth in modern society through each individual who is empowered to reach a new height in their financial standing. We appreciate that and try to empower as many people as we can.

We love nothing more than to sit down with you face-to-face at a desk and understand the reasons behind your need for a loan. Rather than thinking only about our business, we like to see whether your application merits a loan and if yes, design the schedule and the terms of the agreement that work best for you and your ability to repay the loan. We identify your income sources and create a plan so that you can not only pay off your debts but also make savings contributions at the same time. We help you improve your credit score by informing you about your payments to credit bureaus regularly.

Top 10 personal finance management tips

1. Don’t get bitten by the consumerism bug: According to Dave Ramsey, “Frugal today means wealthy tomorrow.” Buy what you need. Don’t get into a habit of buying stuff on credit and loans always. Focus on a generation of wealth and increase the savings too. If you are earning more, start putting off the extra in a scheme that offers assured returns secures your own post-retirement life, and secures the future of your family too.
2. Create a budget and stick to it: One mistake many people make is not appropriating a budget. Whatever the state of your finances and the level of your income, a budget gives you the proper perspective on earnings, expenditures, and savings. It helps you to plan and change your spending habits and make allocations and reallocations under different heads to increase your savings and wealth generation opportunities.
3. Start paying off your credit card debt: Don’t maximize your credit cards or let the debts grow beyond a certain limit. Always pay off your credit card debts and other loans. Try to pay more than the minimum due and don’t increase the tenor of the loans too much. This would mean you are paying off too much in interest. Also, start paying off debts from smallest to largest.
4. Keep an eye on your net worth: Keep a constant eye on your net worth. Like a budget, it too gives you a proper perspective. Your net worth is the difference between your assets and debts and it can tell you whether you are financially stable, backsliding, or moving up.
5. Use the workplace benefits: If you work at a job that provides you with family health insurance coverage, checking and savings account, financial literacy and wellness programs such as also financial counseling, and accidental coverage among others, try to use them to the fullest. These can help you save a lot of money in the long run.
6. Opt for mortgage payments below 28% of your monthly income: As a general thumb rule, experts suggest that you should never spend more than 28% of your monthly income to pay off your mortgage dues. Always remember that you will have emergencies and need to have enough in your hands to take care of those emergencies.
7. Create a contingency fund: Have a contingency fund where you save a fixed portion of your monthly savings. This will ensure that you are better placed to deal with emergency financial expenditures and can pay off debts quickly.
8. Pay your outstanding bills early: Don’t fall back on the payment of your outstanding bills. You can avail of discounts or get additional consumer points if you pay off your bills within a certain date every month. Create a spreadsheet and set a reminder so that you don’t forget the dates on which you want to pay off the bills.
9. Understand the importance of tax management: Like wealth management, tax management is an important exercise. Use online tax calculators to calculate whether the taxes you would pay on your taxes would leave you with enough net income to help you take care of your needs and obligations. When taking up a job, along with the salary, consider the tax payments as well.
10. Start investing in skill additions and plan for your retirement early: Understand the importance of money. Don’t run up a huge debt but know where to make investments strategically. Add skills and knowledge to your repertoire that would help you make faster promotions or get better opportunities. These are meaningful investments and offer a very high return. Also, start planning for your retirement right from your first job. Have a portfolio with a good mix of both short-term, high-paying investments and long-term, stable investments. This will give you stability in the long run and also help you lead a comfortable life.

Following these personal finance tips will help you improve the quality of your life. Indeed, money alone can’t buy you happiness. But it can buy you stability and then give you the leeway to follow a path that you wish to explore.