Managing your personal finance effectively will give you ease at present and help you build an independent, happy, and secure life for yourself in the future.
However, most of us often make some avoidable mistakes that cause an imbalance in our finances. And, we often ignore some good practices that can facilitate efficient management of our money.
Here are some practical Dos & Don’ts so that you can manage your money properly and avoid possible mistakes.
Things you should do
Create earning opportunity
Creating an income source for yourself should be one of your first priorities. Whether you are a student or a graduate you should always look for paid opportunities. You can find plenty of such opportunities at www.youthop.com. Focus on the skills that you have, and start exploring opportunities.
Set a budget and have a saving plan
The time has come for you to set your weekly/monthly.yearly budget and create a saving plan. Rather than having a mental caricature of the plan, it would be better to have it written down for future reference.
Remember budgeting and planning are just the starting points. These are only effective if you regularly track your progress. You can follow the old-fashion notebook or a mobile app to monitor your day-to-day updates.
Saving first mentality
Try to avoid the tendency to spend now and save what’s left. Instead, try to follow the saving first mentality by putting your savings aside after getting your paycheck, and then, spending what’s left. If needed, you can adopt a spending formula. For example, you can use the 50/30/20 rule, which says you should spend 50% of your earnings on your needs, 30% on your wants, and 20% on savings.
Assuming that you have some saving and looking for the best return, try to explore different investment opportunities and invest by calculating the risk and return factors. As you explore, try to invest in yourself too. This will yield surprising returns.
Things you shouldn’t do
Don’t spend more than you earn
Sounds clichéd, right? But the truth of the matter is if you cannot manage your finances properly unless you spend in accordance with your earning. One way of doing this is can be to curtail impulsive purchases.
Start saving now
We often wait for a sizable amount of money to come before we start saving. Unfortunately, we may miss many small opportunities that could have been a good start for saving. Whether it’s a penny or dollar, start saving now. Remember, “One dollar saved is one dollar earned”.
Avoid unnecessary loans
We often resort to loans to meet immediate financial needs. Although this helps in the short run, it creates future liabilities that will create immense pressure on your income. Thus, take loans wisely.
Refrain from rushed investment decisions
Avoid investing money without having proper knowledge about the investment market or product. As you invest in different opportunities, try to diversify your investment portfolio so that you can manage your investment risks. Now it will not be wise to put all the eggs in one basket, will it?
I hope these Dos and Don’ts give you a quick start in your journey. Do not forget to read and consult to experts as you become better in managing your finances.