Personal Finance & Investment

2022-09-18 10:52:00 Open / Comment

2022-09-17 23:43:56 The ratio between the three components—Needs, Investments, and Leftovers—is not fixed. For instance, some people may invest 50% of their income, whereas others may invest only 20%. The percentage must be chosen based on your needs and objectives. You'll get better each month as you begin to budget your expenses.
_“Budgeting is similar to driving in that it improves with practice.”_

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2022-09-17 23:43:49 Your monthly income has now been divided into three parts, as shown in the above image.
The needs and investment parts are simple, but the leftovers part is little challenging. The money in Leftover part will be used for wants/luxury and for expenses which occurs quarterly, semi-annually & annually.

- Wants are non-essential extras for living and working. They include OTT subscriptions, movies, dining out, and so on. These expenses are unplanned and variable.

-There are few expenses which occurs quarterly like your vehicle servicing. While some expenses are semi-annually like Gym membership, OTT subscription etc. Annual expenses include celebrating your birthdays, anniversary, insurance premiums etc. These are planned and fixed expenses, which means you know when you have to pay them. Open / Comment

2022-09-17 23:43:18 Calculate your *monthly needs* and separate it from your monthly income. Needs are expenses that cannot be avoided. Expenses like rent, gas, groceries, mobile-electricity bills, EMIs, and other necessities should be covered by this portion of your budget.
Now set aside some money for *investments and savings.* Your monthly income must have some remaining funds; we'll call them *Leftovers.* Open / Comment

2022-09-11 16:37:11 By following these four steps, you can make sure that your financial foundation is firmly rooted in the ground. Now, you can withstand the strong winds of sudden financial emergencies. Your tree of financial independence is all set to grow stronger and bigger. But hold on, aren't these just theoretical constructs? Things are much more complicated and unique for each person in real life, right? Additionally, the points are not covered in detail!
Yes, I am aware of all these issues. This post was to give the overview regarding financial stability. Every week, I am going to talk about each point separately with and answer your questions personally. So, see you all in next week!

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2022-09-11 16:36:58 Having debt will always make it challenging to become financially stable. Concentrate on paying off debt once you've determined how much money you can comfortably spend (through budgeting) and acquired an emergency fund and insurance. In order to prevent further credit card debt, pay off any outstanding balances. Have home loan or student loans? Make additional payments to eliminate them as soon as possible. You can still pay off your loans earlier even if you signed a 10, 20, or 30 year payment plan. In the long run, paying off your debt sooner will save you money because you'll accrue less interest. Open / Comment

2022-09-11 16:36:46 Insurance includes health insurance, disability insurance, life insurance. We are exposed to numerous risks on a daily basis, including accidents and serious illnesses. The goal of insurance is to protect you and your loved ones from any risks that could result in monetary loss. Examine the best way to manage each of your risks to decide when you need to buy insurance. Because your risks change over your lifetime, assess your situation periodically and make the necessary adjustments. Open / Comment

2022-09-11 16:36:33 This is one of the most underrated advice while discussing Personal Finance. Having an emergency fund can help you prepare for unforeseen circumstances. There is always a chance that you will lose your job and have to survive without a regular income for a while. You might need to pay for an unexpected emergency expense like a big car repair. An emergency fund will help you get through a difficult time by paying for some or all of the expenses. Just keep in mind that your emergency fund is different from your savings and investments. Also, paying your restaurant bills or movie tickets is not an emergency, just saying! Open / Comment

2022-09-11 16:36:18 First off, why is making a budget crucial? Maintaining a budget allows you to keep tabs on where your money is going. If you aren't really aware of your spending, it is simple to go overboard. Therefore, a budget is the single most effective tool for managing your finances. Once you can track your expenses you can start to control it. Open / Comment

2022-09-11 16:35:59 _So what is the prerequisite?_
The prerequisite is to be *Financially Stable*. When you are financially stable, you are confident in your financial situation. You are sure that you will have the money to pay your bills, so you don't worry about it. You have no debt, money is set aside for your future objectives, and enough saved to cover emergencies. Today, we’ll talk about few simple things you need to inculcate in your life to become financially stable. Open / Comment