What is personal finance?
Personal finance is the financial management of your savings, budget, expenses, and investment risk and return for both you and your family.
Why it is important for you?
Knowing the first response, you are aware of the significance of it for each and every one of you who work in finance.
I give you 12 personal finance strategies in this article that will be useful to you. My favorite and most precious personal finance plan is the last one. Enjoy the article and stay tuned!
1. If you want to pay off your mortgage faster, you can take up a 20-year loan and pay it off in 13 annual installments with just one extra payment. Your loan will be repaid in about 15 years.
2. If you want to borrow money, get a loan with a floating interest rate so you can pay it back early without being charged for foreclosure.
3. Check your credit report frequently because it’s a fallacy that doing so can lower your score. the financial institute will enquire then your credit score report (CIBIL) will be degrade.
4. SIP with the same amount and FD with a 10% annual increase. FD will perform better than your SIP. Therefore, incremental SIP is a great alternative for wealth building.
5. The fact that gold imports surged by 35% in fiscal year 2022 compared to the previous fiscal year indicates that we Indians rely more on gold investments than shares. According to historical data, gold will yield 8 to 9% return while the equities market would yield 12 to 15%.
6. We Indians save a lot of money from our earnings but we are slow to invest the same amount. Because of this, many people have larger savings balances than they do investments. As a result, did you know that inflation can eat away at your hard-earned money over time?
7. Insurance is grossly undervalued. There is a security avenue in India, and term insurance is specifically for security purposes and not for return purposes. Many individuals confuse security and return, and they may get the same insurance. For those who are the primary provider of support for their family’s finances, term insurance and health insurance are crucial.
8. When you pay your credit card balance in full by the due date, you will receive rewards such as cash back, but if you miss the deadline, it will be a nightmare for you because the interest rate ranges from 25% to 45%. Only use your credit card when absolutely necessary and keep your credit card use limit to no more than 30% of your available credit. This will have no effect on your credit score report (CIBIL).
9. Many of you do not have an emergency fund on your checklist. What does emergency fund mean? If your monthly expenses are 2 lakhs then your emergency fund will be 24 Lakhs, demonstrating that having a 12-month emergency fund is best, followed by a 6-month emergency fund is preferable and a 3-month emergency fund is average. You can invest in liquid debt or fixed-income securities with this emergency fund, which has a separate account and is solely used for emergencies.
10. Even if you are in your 20s or 30s, having a retirement plan will be vital for both you and your spouse as we age. You should plan to save money for your retirement so that your latter years would be happier and independent.
11. The three new areas of investment are cryptocurrency, meta, and NFT. Its assets are both high risk and great reward. If you still choose to invest in this asset, you can only invest a total of 10% of your entire investment amount in this risky asset each year.
12. The final item, which I have already mentioned, is my finest personal finance plan out of the other 11 plans. “Invest in yourself” refers to our enthusiastic and eager commitment to developing a variety of skills that will help you both professionally and personally. Find your area of strength and invest in it. In comparison to all other financial assets, you will achieve superior results and 100X returns because learning a talent requires time, which is the most valuable resource.
Since you are reading the last paragraph of this post, I want to thank you and congratulate you for being serious about your financial goals. What is your personal financial strategy? Please share it in the comments. If you want to discuss any personal finance strategy with me, feel free to contact me. mujawar.ca@gmail.com
You are an amazing reader.
Bye Bye, Phir Milenge
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