The basics of good personal finance management

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The basic of personal finance management centers around two fundamental problems – how to lower the expenses and how to add more to saving. Needless to say, it is not an easy task especially when the essentials are going up in price and ad world is making things lucrative more than ever. Being sandwiched between needs and wants, common people are at a loss to decide how to manage their personal finance more aptly and accurately. Let us focus on those easy tips that can help you with personal finance control.

 

Repay your debt quickly

Debt is an evil that spawns finance disaster on all hands. To keep your finance in extreme control, you need to be focused on debt elimination as early as possible. There are a few cases where you should keep hold of liquid asset instead of spending all of it for clearing your debt. For example, emergencies like health problems, car repair service, repairing of leakage in pump etc. need a few bucks from your monthly budget and you need to have that much cash in hand to pay for the emergency bills.

Late payment comes with fine and penalty, thereby adding to your expenses. To ensure that you will never be late on scheduled payment, arrange for automatic deduction from your checking account. It won’t be possible to clear the balance altogether but automatic debit and timely payment will build up a good credit history. By arranging automatic deduction from your checking account, you can get rid of worries about paying late fee in the event of delayed payment.

personal finance

By 401(K) 2012 under CC BY-SA 2.0

Debt is not always bad; in a few cases, advantages are also there. Take the case of real estate investment. If you are borrowing to pour in a real estate venture, you will get a good return. And there will be other benefits like tax deduction on interest payment. Education loans are easily available nowadays and they come at a low interest rate. Moreover, the students are not required to pay off the loan until they graduate from college.

Further Reading:  Eliminating Your Bad Credit Record

You may laugh away the proposal of buying a home for saving money but that is a reality many people realize after a few years. Buying a property comes with many responsibilities like maintenance, paying for monthly property taxes and insurance. Still it is a smart idea rather than draining out money for rent, at least you are putting your hard-earned money into something that you own.

Set up a saving account. Have a talk with the bank authority about monthly transfer of a part of the fund in your checking account to it. This is an excellent strategy for money saving. Moreover, you won’t have any problems in getting money for some big events like wedding or birthday celebrations.

Money saving is a part of personal finance which has multiple aspects. There are so many things requiring money that it won’t be easy to plan a ‘saving’ plan. Still, one needs to save for future and for that purpose, it is better to have a plan. If possible, taking advice from an expert will also work a good deal.

By Boris Dzhingarov – Follow him on Google+

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