Key Personal Finance Strategies for Good Credit Health
Managing personal finance smartly is an art. It can be learnt from your past mistakes, advice from a good financial planner and with the help from the different sources like magazine or newspaper articles/ blogs etc. The importance of personal finance strategies is limitless. Regular assessment is the key to success and solution to many problems lie in rectifying the bad habits revolving around over-spending or selecting wrong instrument for parking one’s savings.
Let us understand Personal Finance. It is the term used for the management of your personal saving, money, and investments. It includes banking, budgeting, investments, insurance, mortgages, taxes, retirement planning and estate planning.
In short, Personal finance is all about meting your financial goals which can be the higher education of your child, marriage of your child, buying a property, enjoying retirement and other life goals. Your financial objectives can be both short term and long term.
The Top Tips to Manage Your Personal Finance
- Set a Budget
Setting monthly budget is essential to meet your regular expenses within your income. Budgeting helps you manage your household expenses, school fee, loan EMI, lifestyle expenses, premium for your investments/ insurance and miscellaneous expenses. There are a few Apps helping you manage your cash flow, bill payments, card payments, and others within your set budget.
- Smart Use of Credit Cards
Credit cards if used wisely can prove to be an asset for you but the bad habits of unnecessary spending can lead you to a big trouble. You will end up paying heavy interests on your credit card outstanding payments. It is a very good cashless instrument to make certain financial transactions, payments and more. Hence, make sure you use your credit cards wisely.
- Fund for Emergencies
Emergencies are uncertain and unknown. We do not know when we face such a situation. So it is better to stay prepared for it. Creating an emergency fund helps you handle the unexpected medical expenses, repair or any other sudden large unplanned expenditure without hampering your long term savings plans.
- Limiting your expenses
It is always recommended to spend less than your earnings. Spending more than your income will result in debt and unwanted mental stress so get rid of the financial evils.
Raising personal loan for avoidable expenditure is not a good decision.
- Monitoring Credit Score
Regular monitoring of your personal credit score will help you enjoy peace of mind. You do not have to face loan application rejection with good credit score and can obtain better loan terms. A good financial management habits and honoring loan commitments in time can help you maintain your credit score.
Generally, Credit scores calculation ranges 300 to 850.
Below you can have a look at it:
- 720 and above = Good credit
- 650 = Average credit
- 600 or less = Poor credit
Individual can also take the benefit of the Credit Doctor Services provided by the financial companies like Antworks Money and others under which credit counseling services is rendered. You can apply for the credit counseling services online 24×7.
- Loan Repayment
Payment of the loan EMI on due date is necessary. It is highly recommend paying all your EMIs on time. Do not miss any as it can attract penalties and interest. It is your wise financial strategies that can help you manage your debts within your limited funds.
Important to note:
The following three factors will help you avoid mistakes hindering your planned personal finances:
- Importance of timing
- Discipline in life
- Detachment of emotions
The three key Personal Finance Principles are prioritizing, evaluation, and restriction.
An individual can educate himself by taking the advantage of Personal Finance Education Online anytime and from anywhere.
Thus, the above discussed tips and personal finance strategies will certainly help you achieve your long and short term financial goals in your busy life.
