Sunday, October 25, 2009

How To Improve Your Personal Finance instantly-Follow the smart way

How To Improve Your Personal Finance instantly-Follow the smart way

1. You Should Know your present financial position well.

Well before you plan to save for any of those financial activity, like your children's education, retirement or buy that dream home, you should understand where you stand . You may take the pain of getting a smart financial planner for yourself if you do not know how to design a customized financial plan. If you do know it then you can save considerable amount of money.

2. Do Save money regularly and make it a habit.

Habit of saving is a wise virtue. You really never know when you need that extra amount of money when unexpected mishaps comes your way like job loss or a loved one falls suddenly sick which demands a lot of expensive medical attention . So it is safe to save money and it is a must for you to keep 3-6 months of your current salary separately for emergency situations.

3. You should Control your expenditure.

Even if you are rich , you must control your flow of cash. The basic rule is what comes into your hand needs to be more than what goes out of your hand. You need to know what is giving you income and what is causing you to spend.

4. If possible reduce your daily expenses

You should identify those expenses that are not a necessity and remove them smartly. For an instance paying for your weekly magazine subscriptions which you really do not read is a sheer waste of money. When you have successfully figured out all these items that are not worth your money, you can nicely cut down your regular expenses by 25-30%. It is always recommended to only have one credit card so that you can better track your daily expenses.

5. Make sure you keep track of your debts

Your debt incurrence should never exceed your total income. Gambling and vices can lead you into serious debt. Poor and dumb money management skills can also result in debt even if you are rich or have inherited million dollars from your relative.

6. Try to be frugal but never be stingy

Only buy goods that give you good value for your money. It is always wise when you know when to smartly buy something of high quality and pay a premium versus when to buy something less branded but still serves similar purpose as a branded material. If you always choose cheap items that item could sometime fail in a short time making you buy another one, this will eventually lead you into greater expenses than you did not anticipate. You will also be called stingy, who is not willing to spend the money when it is necessary.

7. Get Financial education or information

There are loads of free financial information when you surf the internet. You can also attend seminars, read books, read newspapers and listen to audio tapes for more financial news and knowledge.

8. Always be good and generous

When you are truly generous, some how everyone know this and reward you back many times over. When you give away something selflessly, there is a natural tendency for the other person (the receiver) to give you back.

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