Act as a pro – Personal finance simplified

Personal finance is about managing your money including saving and investing. It covers budgeting, banking, insurance, mortgages, investments, retirement planning, and tax and much more.

It is extremely important because it’s considering a variety of activities related to your finances and how to manage them, as you manage your health, work, relationship, and other parts of your life. It helps you to be a more financially responsible person and to develop financial discipline to reach your financial goals.

Personal finance doesn’t have to be complicatedat all, if you break it down and know it in detail, you’ll see personal finance as very manageable steps that you can manage, stick to it, and have great benefits out of it.

Follow the below steps to your personal finance freedom

Create your own Budget (Personal)

You must to create a budget. Why? it is the foundation you’ll build all the rest of your personal finance on it.it is making a plan for your money. Money coming in and money going out. This is how you do it: #1: identify all your income sources. Income is any money you plan to receive during that month. It includes your take home money (from work) and any side money it comes to you through any side hassle. #2: you’ll subtract all your expenses. Expenses such as food, utilities, accommodation, and transportation – are these are the most important expenses. Then start listing and subtracting your common monthly expenses like insurance, children school..etc. If there’s still money left, list out all the extras like eating out, shopping and entertainment. If you have money left after subtracting all your expenses, Put your money to work toward your money goal, like saving & paying your debts. If you end up with a negative, you need to cut expenses until your income minus your expenses equals zero (zero budget method)

Build an Emergency Fund

It’s the money set aside to pay for large, unexpected, and Unforeseen expenses. Start with a $1,000 fund. Then once you’ve paid off all your debt use that extra cash you were spending on debt payments to build your fully funded emergency fund (recommended to be from 3 – 6 months of your monthly expenses) Keep this money liquid, make sure it’s available, it needs to be at the ready if you need it .Your emergency fund isn’t a long-term investment and don’t use it for such. Once your emergency fund is fully funded, you’ll be ready for whatever financial issues that comes your way. It is a financial security will help you sleep better at night

Save for your Retirement

Target to save 15% of your income into retirement investments (with AYR more than 10%+) once you’ve paid off all your debts and saved up the fully funded emergency fund.

Hunt for the Right Insurance

Auto, health, term life insurance and long-term disability insurance are the most important insurance to have. But don’t worry: You don’t have to be an insurance expert to be well insured, you just need to be proactive to hunt for the right one

Pay Off Your Debt

Debt is a weight that presses you down and holds you back. debt keeps you from ever getting ahead. It holds part of your paycheck tied down every month with payments for something you bought months or years ago. Nobody wants this type of stress. Your income is your greatest wealth building tool, if you utilize it on monthly basis to pay your debts, you will be held back and won’t be able to grow your wealth. You must get rid of your debts as fast as possible, and it must be a target. How you do it? The extra monthly you have in your budget, you put it through paying off your debts immediately

House Purchase Decisions are critical

There are couple of points you take into consideration before buying your house:
1. Don’t spend more than 25% of your home income on housing costs. If you own your home, that means your mortgage payment and other related should not exceed 25%. If you rent, the rent then your rental and other related payments shouldn’t be more than 25%.
2. Get a 10 – 15-year, fixed-rate mortgage.
3. Save at least 10–20% of the home’s cost for a down payment before you buy a house. If you don’t have this saving ready, wait, save then buy with this down payment
Without following those points, you can have an amazing house, but it takes up so much of your income that you will have dramatic financial problems in other areas.

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