Best ways to manage personal finance

Have you ever been cash-strapped at the end of a month? Well it all ballparks to one single word-“control”. If you cannot control what you spend, there is no point in discussing financial freedom or personal finance management. However there is still hope. If you want to accumulate wealth by managing what you spend, then you should know that it is not very difficult. Even though it is very simple, there might be times when it becomes a bit complicated. There are two major hurdles when it comes to managing your personal finance.

The first and foremost challenge is that most of the times, we are never contended with what we have. We are never satisfied with ourselves. Instead we seek joy in the form of material pleasures. The second hurdle is that we get perplexed by the endless list of ways to invest money. We are never sure how to invest money by the time we retire. We still ponder on the various ways to track the money we spend each month.  We worry about how much money needs to be invested in health insurance. By the time we make a decision, we become completely exhausted. Personal finance management is a vast topic. However here are a few simple steps that you can follow to be on the right track.

• Watch what you spend- Mostly people don’t enjoy the thought of tracking what they spend. Though it might seem like a nice idea in the beginning, they will gradually lose their interest over a period of time. Here’s a trick that you can try. Make it a point to purchase things with credit card or debit card. When you buy things like this, you will not only get rebates but you can also maintain a complete list of whatever you’ve spent.

• Know the value of what you own- This one of the key financial management tips that you need to keep in mind. Always know the value of your assets excluding your debts. Your monthly budget is closely related to your net worth. If you spend more or less than what you own, it will all be visible to you. All you need is a simple spreadsheet and you are all set. If you need more sophisticated tools, then you can opt for software like Microsoft money.

• Invest your money-The sooner you invest, the better will be your future. It need not be a humongous amount. Start with a meager sum and gradually invest more as your income increases. Stop worrying about where to invest your money. Start with mutual funds. If you don’t know how it works, you can always seek professional assistance.

• Be prepared for your regular expenses- In addition to the usual monthly expenditure, you might have to encounter situations like health issues, vehicle repair expenses, festivals, get- togethers, parties and more. It is better to keep aside a part of your income for such unexpected situations. You need to be well planned. It will help eliminate unnecessary tensions.

• Maintain an alternate source of income- Even though you might earn a decent figure of salary, it is always better to find a source for generating additional income. It could be a part-time job or investment in stocks and shares. There are so many options available for earning more. All you need to do is find the one that suits you the most and then get going.

• Purchase your own house- It is true that real estate prices are crashing down at present and most of us feel that living in a rented apartment is a safer option. However when you own a house for a longer period of time, it will be more profitable for you. On the other hand you can never expect something like this to happen if you live on rent. It is always a good option to invest the money spent on rent for a better purpose.
Hopefully these tips should help you maintain a financially secured life in the years to come.