Tips for Avoiding Personal Finance Mistakes, Financial Planning is the most important thing in any person’s life as it contains the element of money which affects every body’s life. There are some mistakes that most of us make while choosing some of the beneficial options but fail to identify the risks attach to it. I have mentioned some of the tips which would save you from the loss that occurs due to some silly mistakes. Note down this all tips to become rich through values. check more details about “Tips for Avoiding Personal Finance Mistakes” from below…..
Tips for Avoiding Personal Finance Mistakes
Beneficial Tips to be noted down:
1. Prepare Monthly Budget – First of all, you should definitely have budget or the estimate of the expenses which should be incurred and bifurcation of the expense which can be avoided. There should be priority set amongst the expense which expense needs to be incurred specifically such as electricity expenses, maintenance expenses, etc. and to avoid the expenses which are not relevant at the point of time but which can be deferred to some other point.
2. Proper difference between Equity and Debt instruments – There should be any one type of instrument that should be taken but diversity of instruments to spread the risk over the other. There should always be balance between the both types of the instruments which should be analysed and bought out according to the situation of that particular instrument in the market. Proper research work needs to be done before buying the instrument.
3. Analysing sources of income – There are ample of opportunities available with every individual to earn the money. The only thing required is the knowledge and the ways to make it happen. The person needs to be very much active in the daily new inventions in the market which bring many types of earning sources to an individual. It’s the perfect time and perfect amount which needs to be inculcated to get the perfect returns.
4. Don’t Mix between Insurance and Investment – There are various insurance plans available in the market which act as both insurance and the investment also as they provide the cash back offer after the policy gets over, but it is not actually beneficial for the individual. So never take up the call to get the benefits from both, as the purpose for both are very different.
Must Read –
- Financial Ratios – Core factor to Analyse financial statement
- Financial Markets – Types, Scope & Objectives
- Internal Rate of Return – Intro, Advantages & Disadvantages
- Net Present Value (NPV) – Meaning & Calculation
5. Don’t buy Luxury products on credit – There is always the thought in the person to get the product first and then think of the paying the same. If there are options available with the buyer to make the payment in EMIs than most of the people buy it on it but this is not the right decision as there are various other charges involved while opting for the same. So avoid this type of marketing techniques.
6. Separate fund for Emergency – I have seen most of the families lacking on this point. They do not have separate funds kept safe and taken out when the situation is not good for the family. This is essentially the most important point that should be taken care of. Future is not certain. So there should always be some funds kept for the contingencies which may arise in the future.
7. No Home loans without proper earning stage – There has always been that thought in the minds of young graduates that they should have there own home built up for which they acquire the loans at high interest rates. I think so, this is not the right decision as there would be additional liability in the part of the individual which may make the person live sleepless nights.