Tips on managing one's finances : Part I

Ptrikha By Ptrikha, 21st Mar 2013 | Follow this author | RSS Feed | Short URL http://nut.bz/2v7g5_8r/
Posted in Wikinut>Money>Investing

Managing your own finances proving to be troublesome!
Here is some help.

Managing one's finances requires a lot of planning

After having tasted gains as well as losses while trying out different instruments of Financial Investments, I have gained a valuable experience. To be frank, it has been more of a bitter than a sweet experience. This made me think that I can share some of that experience and tips here. I feel that whichever country we may belong to, these tips would anyways be handy.

Here is the first tip:

1)Plan, plan and plan as to how much income and expenses you would have over next two to three years. Also, include the additional expenses that you are likely to incur during any festive season, or any family function(s). Say, Average monthly income is 5000 units and expenses are 3250 units.

So, now you have 1750 units per month as a starting value for savings. My recommendation is : keep at least 550 to 600 units of these for emergency funds, and keep rest of 1150 or 1200 units for investing.
This amount can vary depending upon your local economic conditions, stability, and a host of other factors and may go up or down.

2)Whenever you are buying any Investment plan- be it a Unit Linked Insurance, Mutual Fund, Shares, Short Term debt Instruments, or Governments or Private companies bond (or even Fixed Deposit), always keep in mind the tenure of the investment, and then decide the sum. For e.g- If you have a total savings of say, 90,000 units at a given point of time, do not take an investment plan which requires you to invest 50,000 units a year for next 5 years.
You might think that in successive years, you would have a savings that would enable you to pay this much. Yet, it might so happen that you have some "unforeseen" expenses and liabilities that arise, and you are then in trouble. (This partially happened to me). So, be cautious.
In next part, I would be back with some more tips.

Tags

Managing Finances, Personal Expense Management

Meet the author

author avatar Ptrikha
Ptrikha is an IT professional, with a great appetite for writing on a variety of topics ranging from Business, Economics, Politics, Sports, Technology, and much more. He has written over 100 Articles

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