Personal finance need not be tedious. It would entail discipline on a personal level. To effectively manage your own finances, there are five golden rules that could serve as guidelines. They are as follows:
1. Spare some cash for your savings.
Be sure to save for the future. You need not allocate a huge portion of your regular income for savings. Start by sparing just a few dollars each day. This may also mean getting more frugal on your expenses. Always grab the opportunity to lower costs and save money. You may open a separate savings bank account for your spare money. If you would keep on saving on a daily or weekly basis, you might be surprised how much you could possibly save within a year.
2. Emerge out of debt.
Debt is not always bad especially when the amount is used to fund an investment or an emergency. However, be sure you would be able to properly and effectively repay your financial obligations in a timely manner. Loans accumulate and incur interest payments and other fees. The longer you keep such debts, the more money you would have to shed out to service the loans.
3. Set protection for what you own.
Invest in insurance products. Doing so would surely cost you a significant amount of money but the benefits would be more than worth it. You may insure your car, home, health, life, and other significant belongings. Insurance is a financial protection against risks and uncertainties that the future may bring.
4. Control your income.
These days, it is financial unhealthy for people to be content with a single source of income. You could still take advantage of your productivity through grabbing other income opportunities. The more income you generate, the better your finances would be, logically. You may start making investments that would surely bring about ideal returns. Do not forget to observe proper discipline when handling and controlling income flow.
5. Have some leverage.
Leverage your income. This could be somehow similar to controlling your income. Try to find and obtain income sources that would not be directly dependent on your efforts. You may invest your savings in real estate, mutual funds, or stocks. Establishing a small and home-based business may also be ideal. You could be sure your income potential would be bolstered exponentially. It is also assuring to know that your money could grow 24/7, even while you sleep. It is advisable not to quit your employment while holding such investments and/or small businesses so you could be sure income flow remains robust.
Andrew has been writing on personal finance over the last 2 years. Andrew specialises in business loans and low doc loans