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Managing Personal Finance.

by Aesthetic Writer 8 months ago in personal finance
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Essential points to remember while managing Personal Finances.

Managing Personal Finance.
Photo by Sharon McCutcheon on Unsplash

Personal finance simply implies managing your money as well as saving and investing. Managing personal finance means attaining a better and clear understanding of your financial situation to make most of your assets in day-to-day life and in planning your future. Managing personal finance has many advantages:

  1. You can understand your money better. Managing personal finance enables you to get a detailed understanding of your financial situation. You will get to know if your income is enough to satisfy your daily lifestyle. You can choose the best investments which can double your money. You will get to know if you need more sources of income. Thus, you can have full control over your money.
  2. You can properly manage your spending and savings. With proper financial management, you can properly track your expenses. If you find that certain expenses are unnecessary then you can cut them and put the extra money into savings.
  3. You can establish clear financial goals. If you wish to be financially free then your priority is to set a financial goal. In dependence on your financial goals, personal finance management helps you come up with the best strategy to achieve your goal. For instance, your goal is to reduce your expenses and save more money, than regular monitoring of your daily expenditure is one way to achieve it.
  4. One of the most important aspects of financial management is that it awakens your desire to earn more. It will keep you reminded of your expenses and financial situation and fuel you to achieve your goal and earn more.

Important things that one should do while managing personal finance:

Passwords for accounts:

Always keep a strong password for your accounts whether it’s your Savings account, Demat account or PPF account. At least a single person whom you trust whether it is your wife, sibling or parents should have access to these passwords. Anything can happen, such is life. God forbid if something happens to you then all your money will be accessible to your trustworthy person. Now, here’s a suggestion you can maintain an excel sheet with this person which should be password protected and whenever you change any password then you will simply update this excel sheet. This way you both have to remember only a single password of the excel sheet. You don’t have to keep this sheet on your mobile phone because if you lose your phone or wish to sell it, your data is in danger as deleted data is recoverable. Keep it on your domestic pc or in Pendrive.

Account Nominations:

Every account you have should have a nominee. Nomination is a facility that allows an account holder to nominate an individual, who can claim the proceeds of the account, post the demise of the original account holder. The nominee can be anyone you deem to be your first relative - your parents, spouse, kids, siblings etc. Some investments also allow you to have multiple nominees where you can assign percentages of your money to each one of them.

Operation of Account:

There are basically two different choices available for the operation of your account. One is Joint account and the second one is the Either or Survivor Account. You should always go towards the Either or Survivor account as the final balance and interest (if any) will be paid to the survivor on death of anyone of the account holders. The survivor can opt to continue the account. Similarly in a joint account both the account holders can operate the account but they both have to be present, only one person cannot operate this account.

Most people want financial freedom, but they lack skill and knowledge to do it. Some people think that earning more money will help them save more money but it is not possible because if you do not have a keen sense of knowledge where your money is actually going, you can never achieve financial stability. They simply lack the ability of managing their finances. Once you start managing your finance you will get a better perspective of where and how much of your income you are actually spending. If you spend at least two hours managing your finance in the long run you will be able to save more and be able to achieve your financial goals.

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About the author

Aesthetic Writer

We are a group of highly motivated individuals who want to share our thoughts and knowledge with the World.

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