Are you handling your finances well? Or do you need further improvements? In this article, we are talking about the 25 best practices to maintain good financial management.
The basics of a sound financial management is not that difficult as it seems. It all depends on your personal well-being and daily financial habits.
The fact is that everything is dependent on how competently you manage your finances & engage in wealth creation. Although, all wise people have a well-planned budget to follow. However, you tend to violate it sometimes. Below is a few recommended list of practices for best financial management & improve personal habits:
1) Set up budgets- How often do you track your spending? How is the money being used?
2) Pay timely bills- Be it your credit card payment, Loan EMIs, phone bills, utility bills, etc. make a timely payment.
3) Validate your credit history & score- Check your credit scores through websites which offer free information.
4) Diversification of funds in different portfolio avenues- There are many options for investment between mutual funds to term deposits. Its best to have your portfolio diversified to avoid losses.
5) Avoid spending beyond your paying capacity.
6) Plan for both short term & long term financial goals.
7) Fund for an emergency account
8) Plan in advance for your retirement days.
9) Pay off your financial liabilities at the earlies
10) Doing proper research before making investments. You could, of course, get the help of a financial advisor if it’s all Greek to you. Don’t be shy!
11) Keep a check on your investments every fortnight.
12) Try to keep your insurance handy, whether life or health.
13) Draw a strict line between your needs & whims to be able to know your best spending.
14) Do not be driven by the competition in the circles. Stop trying to copy their lifestyle, conduct etc.
15) Take a Personal loan only when an urgent need falls upon you. Its implied that too many loans can ruin your financial position.
16) Stay safe of the fake return scheme which may not be so useful.
17) Start using credit cards when it’s the last option. Do not cross the 30% credit utilization levels.
18) Explore about Indian taxation rules & save as much as you can on the taxation component.
19) To have a tax advantage, punch in taxes on time.
20) Ensure to keep small cash for on spot shopping. It’s not acceptable to have your wallet completely empty.
21) Do not indulge in addictive shopping. Create a reasonable list of items & make a purchase of those only.
22) Don’t forget to pay the minimum due amount, if not the full amount. If you’re missing out payments due to laziness, then you’ll lose a lot as interest.
23) Swipe your credit cards when you’re certain to pay back at the end of the month. Your existing financial conditions matter the most.
24) Conduct a fair comparison before you buy financial products in life.
25) Become well versed with the digital technology since, we are going “digital-est” every day.
So, which one would you choose for a satisfying finance management plan.