Personal Finance is all about meeting your financial goals keeping in mind your expenses, savings and investments. It can be a short-term financial need, a retirement plan or saving for any unforeseen circumstance. It is absolutely necessary to learn to utilize your finance wisely through financial strategies like budgeting, spending and savings. The whole concept of personal finance revolves around planning your finances today for a better tomorrow.
Read more to take control over your personal finance from budgeting to planning!
However much you earn, you must want to make the most out of your hard-earned money. To do so, you need to manage your finances wisely. Personal finance covers a whole lot of terms essential to an individual’s financial management such as income, investment, savings, budgeting, taxes and retirement plans.
We all want some freedom with our earnings while taking on financial responsibilities as well. But personal freedom and personal finance go hand in hand. If the question is about how important personal finance is, then it should work as a reminder that you need to look after your finances better than you are currently doing. Managing personal finances include various aspects such as savings, investment, insurance, taxes, loans and retirement. Personal finance is important for both long-term and short-term financial planning.
There are five important areas of personal finance that you need to take care of. These areas are:
Following the basic 12 principles will lead you to successfully manage your personal finances.
Following are some of the strategies which will help you manage your personal finances better.
From a very young age, we are taught how to earn. As we start earning, it is equally important to learn what to do with the wealth earned. Otherwise, it will prove to be of no benefit. Personal Finance revolves around planning your finances today so you can have a better tomorrow.
Ans: The 30-day rule is for impulsive buyers. While making a decision about some big purchase, it is advised that you wait for 30 days and see if you still need to go ahead with the decision. Following this rule helps the impulsive buyer not to overspend.
Ans: Embezzlement is the term that refers to a white-collar crime in which an individual does fraud or inappropriately uses a fund entrusted to them. The most common form of embezzlement is cash skimming done by the cashiers.
Ans: IRADA, or the Indian Regulatory and Development Authority, is the autonomous body responsible for managing the insurance industry in India, under which comes both the life insurance and general insurance companies.
Ans: Mortgage protection ensures that the mortgage payments are made in case of the sudden demise of the borrower and that the burden doesn’t fall on the family members or the dependants.
Ans: The basic difference between dividends and profit is that dividends are parts of the profit. When a company earns a profit, it shares the profit earned among the shareholders as dividends.
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.