All of those who are earning right now know how difficult it is to take care of your finances, especially if you have loans to take care of, be it a personal loan, student loan, house loan, car loan etc. So basically, the first step to taking control of your finances is doing a budget.
If you have a definite budget, that you follow strictly every month, then it would be easy for you to plan your finances. You would be less likely to end up in debts, and more likely to be accepted for a loan. So you need to see how much you need to spend, and how much you need to save in order to live properly, pay off your loans as well as still have some corpus left to go on a good holiday every year.
Analyze your Living Cost –
Firstly, you need to see what exactly your living cost is. This includes how much you pay for your household bills, financial insurances, travel cost, cost on your family, as well as leisure cost. Also, add the amount of EMIs that you need to pay each month in this, and this will add up to your total expenditure. For this, it’s important if you make notes or keep a diary.
If you have a family to support, sit down with them and make a monthly budget, that this is the amount you’re going to spend, and try not exceeding it.
Say ‘No’ to credit card loans?
In case you have loans, or you probably owe money on credit card, then try paying off the debt which charges the highest rate of interest first.Personal loans charge a lower rate of interest from the bank than credit cards, so make sure the credit card bill gets paid first. Use a saving calculator in case it’s hard for you to calculate how much you need to save.
Have some emergency savings –
Your first step is to have some emergency savings that is money to fall back on if you have an emergency and once you have done this, try not taking a loan in case you buy a car. You can put money in your PF, pension, or even make an investment plan. Take the first step, and the rest will automatically follow.
You can also put your money in a current account, as it is capable of handling large volumes of receipts as well as payments. And a current account carries out all business transactions promptly and properly. Plus what it does is also enables limitless withdrawals in line with the levied cash transaction fees, if any, so this is a great prospect.
Open a bank account, and it may seem obvious but a lot of people do not do it and then suffer in the end. So having a bank account means investing as well as earning a good interest on your money too.
Just go and take a deep breath and open any of the bills that have been ignored by you. Once you’ve done this, at least you’ll know what you have to deal with and you can work out what you need to do after that.
There’s no ‘one size fits all’ approach and remember that your finances need to be personalized according to your risk profile, situations, etc.
