For anyone to become financially successful, it is important to improve their personal finances through better organization and planning. Doing it well will help you save time and effort and live a stress-free life. This article will discuss some of the expert strategies that will offer you a considerable return with a little bit of effort in financial planning.
Kavan Choksi gives tips on improving personal finances
1. Track spending
Kavan Choksi points out that if you know how much you spend on various daily living needs, it will become easier to control and manage your savings. As per at thumb rule of finance, ‘what gets measured get managed well.’ So, the primary step towards gaining proper control of your finances is to understand where your spendings go. There are many free online apps, too, which you can download on your smartphone to track and monitor your daily spending on different expenses.
2. Pay yourself
People tend to pay their bills first and then only look at other aspects of money management. Many people never achieve any financial security with this approach. When it comes to personal wealth building, the road to wealth is to pay yourself at the first point. When money comes in, you should set aside a particular amount for your personal spending and then for saving. Then only you have to deal with the outgoing of your funds.
3. Reserve funds
If you are not an aggressive saver, you may still keep enough money to cover your daily expenses for at least three months. It is ideal for keeping a store of living expenses for at least six months, and you shouldn’t draw any money from it until it is most necessary. If you lose your job or if a calamity strikes, you may use these reserve funds rather than going for emergency loans with huge interest rates.
4. Automate your regular payments
It may not take you much time online to arrange for an automatic reduction of the monthly recurring expenses like the car loan payment or the electricity bill etc. Doing so will save you a lot of time and effort in transferring all these funds by yourself and make sure that you make the payments on time.
5. Demolish the deck of cards
You may have many credit cards, store cards, debit cards, etc. There are a couple of issues associated with it. It means a lot of incurred charges and add-on fees. Another thing is that the cards you have handy will offer you easy access to a lot of credits which you may not actually need on second thought. So always keep an eye on your debt increasing, especially those without any self-discipline. Try to spring clean your supply of cards and keep only those which you need the most.
You also may try to digitize your receipts and cut short your category of expenses in order to gain better control over your spending. Kavan Choksi says that there are many ways for you to save money and control your expenses, but at the first point, you have to make up your mind for it and be diligent about it. Building personal wealth is not a tough task if you plan it well and genuinely stick to your disciplined plan.