Handling your personal finances is something that might seem easy when you hear it but when putting it into practical application, you might not feel so. Such problems regarding management of personal finances occur mainly with changes in the economic condition of your life. If you are a college student and living on your own, then this sudden change of pattern of spending can put you into trouble. You may not understand how to economize initially and keep everything within your budget. Similarly, a change occurs when you start earning by yourself. After getting the money in hand you might be clueless about how much to spend where.
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1. Saving for emergencies:
One of the most important things to do is saving money for emergencies. You should save at least for a period of six months before depositing the amount in a bank account so that you have accumulated a considerable amount of money. You should see to it that you can withdraw only a specific amount for some given reason at a time when you need it.
2. Tabulate your purchases:
It would be a good idea to keep a record of what you buy. If you do so at the end of each month, you wouldn’t have to sit and wonder where you spent all the money. Keeping a tab on weekly basis helps you know your expenditure and how much you have left. You can then use this information to buy necessary items only, if your budget falls low.
3. Organize your expenditure:
It is important that you pay off your debts first. If you have a low interest debt that you are currently repaying, then you can repay part of it and also save money. Also you should pay off the debts with a higher rate of interest first so that you can save money in the long run.
4. Look out for income sources:
You should be on constant lookout for income sources that can bring in extra money. If you have things in your house that you don’t use and won’t need in future, then you can sell them off to earn some money.
5. Clearing your taxes:
If you are an employee who pays taxes, then you should stay up-to-date with clearing your taxes. If your tax statement is not paid fully within time, then there can be serious financial hassles and you would have to pay extra money as surcharge and fines.
Apart from above, you should avoid using credit cards as much as possible. When you pay in cash you would know the exact amount you are spending. In turn it will help you keep a record of your expenditure and thus you can avoid falling into debt and managing your finances efficiently.