4 Tips To Get Your Personal Finances In Order
Personal finances can be anything from a rupee in your wallet to a lakh taken from a bank or BFSI. All are meant for personal usage like weddings, holidays, or festivals. If you’re a beginner, you will indeed find difficulty managing money, especially when there are multiple sources to rely on. Fund management for personal finance is all about personal planning. However, if you’ve lost track or messed up, you must consider taking cues from peers. Even if you want to begin without losing track or messing up in the future, you
No matter where your finances are coming from, the following tips from experts and fund managers at Piramal and elsewhere will help your money grow or stay stable, at least.
- Budget to bud!
The simplest method to get your finances in order is to create a realistic, well-thought-out budget that you can follow. Although it may seem obvious, many people face a vicious cycle as a result of their financial stress. They avoid thinking about money because it makes them anxious, which leads to them falling deeper into debt, which in turn leads to even more anxiety, and so on.
Setting realistic goals for how much you will save and how much extra money you will make is the key to making a budget that works. Instead, thoroughly track and report your financial situation using your budget. The first step toward true financial freedom is having a solid understanding of how much money you truly have, spend, and have available for saving.
Create a spreadsheet document to begin. Include a list of your monthly expenses under
the very last row. Then, to the right, enter the amount you spend on each one, along with the reminder due date. To be sure you’re not spending more than you’re earning, add up the sum at the bottom. Try to identify any areas where you might be spending more or less.
- Create an emergency fund.
Building an emergency fund to meet unforeseen costs is another efficient strategy to lessen financial stress. Building up a sizable fund may seem impossible if you are suffering from debt and aren’t making enough money to save. However, saving Rs 10,000 every month will quickly grow into a useful nest egg. To get things going, you should also think about selling any clothing, books, or other possessions you own but haven’t used in a while.
At least until you are debt-free, you should strive to have at least Rs. 10,000 in your emergency fund. Aim to have three to six months’ worth of living expenses in your fund once you have enough money to save a little extra.
Your stress can be reduced in several ways with an emergency fund, and it most likely will. Most significantly, it will give you the psychological safety you require to remain composed in the most trying circumstances. You will have enough money to cover any unforeseen expenses, such as a car repair or an impromptu vacation to see family. As a result, you won’t fall deeper into debt and will be able to avoid alternatives like taking out loans or racking up credit card debt that you can’t afford to repay.
- Be honest.
Now that you’ve created a budget and an emergency fund, it’s time to confront some unpleasant realities. Financial stress usually means you’re in debt, which either indicates you’re spending more than you’re making or indicates you’re dealing with other stressors like caring for family members or other people in your life.
The good news is that making extra money is a lot simpler than it used to be, thanks in large part to the growth of online freelancing opportunities. Typically, Indian freelancers earn Rs 400 per hour. Many people can effectively increase their income and reduce their debt by working just a few extra hours per week.
Nevertheless, it will be easier to change your spending habits than your income in the short to medium term. Cutting expenses entails refraining from compulsive shopping and missing those pricey nights out with pals. It also involves making some less obvious decisions, though.
One of these entails relocating to a less expensive apartment. This may sound like a significant improvement, but for the majority of individuals, rent accounts for roughly 30% of their monthly outgoings, making it by far their largest monthly expense. Living in a less expensive place for six months will save you thousands of dollars, not just in rent but also in lowering interest payments on your debt if you can afford the high, one-time cost of a move.
- Ask peers
The guilt or embarrassment that accompanies financial stress is sometimes the hardest part. What are you afraid of? Being unable to manage daily expenses or learning that you aren’t rich? The latter, right? No.
To eliminate your debt and reduce stress, you must overcome this phobia. There are many programmes available that can help you regain control, including debt management consultants, credit counselling services, and financial planning. Even websites primarily focused on assisting you with financial investments offer free advice on how to reduce debt and balance your budget.
It is worthwhile to take the time to research these services in depth. Beyond the professional assistance and support they may offer, the benefit of utilising them is that you relieve your friends and family of some of their responsibilities. Although you should always be open and honest with your loved ones about your finances, the anonymity of a professional advisor lessens some of the pressure you might feel about handling the issue on your own.
- BONUS: Track
Let us now complete the circle. Review your budget and make adjustments to it. It will reflect your current financial situation. Monitor this progress as you start to pay off your debt(s) and as your financial stress fades. Instead of living in ambiguity, knowing how much money you have will lower your stress levels. If you’ve saved, treat yourself. Reward yourself! For every Rs 500 you save, you can spend Rs 50 on a McDonald’s burger.
Conclusion
Many will tell you ‘how.’ But only we have told you why, where, when, and then: how to bring your finances back on track. Piramal Finance has many such blogs and articles to help you do the right thing with your money.
Do visit our official website to learn more about everything related to money.