Everything You Need to Know About Personal Finance
Personal finance can cover a lot of money related activities. Whether it’s spending or saving, personal finance is essentially financial management that you need to do to budget, save, and spend monetary resources over a period of time. Naturally, this may take a while to understand and implement. In this article, we’ll help you learn the basics of personal finance.
There are four key components of personal finance that must be understood before you can begin your financial planning:
- Employment: This involves all the things you do to earn money and includes factors like your salary and incentives.
- Personal Budget: This is what you follow in order to manage your funds.
- Credit and Debit: This involves any additional way/ways through which you might be acquiring funds and spending them. Home, student, and Personal Loans fall under this category, along with credit cards and other items.
- Retirement: This involves anything you do to save for your future, including insurance, savings, pensions, etc.
As you continue to develop an understanding of the basics of personal finance, keep in mind that having a relationship with a well-rounded financial institution is essential to achieving your financial goals. Bajaj Finserv provides multiple services to their customers, including saving, earning, and investment options for both salaried and nonsalaried individuals.
Principles to Follow
There are some simple principles of personal finance that should be followed as you begin managing your finances.
- Spend Less than You Earn: This principle is based on a very simple concept: If you want to achieve financial freedom, you need to spend less and earn more.
- Keep Earning: Seek out other ways to bring financial profit into your life. Whether it’s starting a small business or making an investment in some mutual funds, there are many ways to bring more income your way.
- Live Life Frugally: This means utilising your funds to their fullest potential. Make a budget and strategically plan what you’re going to spend money on every month.
- Manage Your Money: This includes paying off debt, building an emergency fund, starting a retirement fund, and investing.
- Understanding Your Own Financial Goals: Determine your future monetary goals and start taking immediate action to achieve them. Managing your personal finances is more about financial freedom and less about being wealthy.
Having the right tools at your fingertips can prove to be quite helpful as you move toward your financial goals. Bajaj Finserv has a convenient online system that allows you to track payments, apply for loans, and calculate important amounts like EMIs
What’s the Point?
Now that you understand what the basics of personal finance are, let’s talk about why you really need it. The importance of personal finance is - in order to achieve the financial goals that you desire, your personal finances must be managed properly. Having a hold on our finances means more freedom to do the things that we want.
For some that might involve investing in a retirement plan while for others, having the funds to put your children through college might be the priority. Whatever your dreams might be, managing your money properly can help them become a reality. Bajaj Finserv understands this, and offers Personal Loans with reasonable interest rates, convenient Investment Programmes, and so much more to make financial planning easier.