- Personal Finance
Principles of Personal Finance Fitness
Every day, millions of people look for answers to their personal finance problems, solutions to their losses and reasons for their failure to meet the mark. Too often, they are caught in a position where they are merely reacting to the problem after it has manifested itself in seriousness.
To fix things, we will have to start at the beginning by rounding up those little nuggets of preventive wisdom that can stop you from finding yourself in a financial soup. Any time you feel stuck and are looking for some insight, feel free to riffle through our financial tips to change your predicament and who knows, maybe even your life.
Seven Life Changers Coming Up
- Keep a Calendar of Finance: Scan your financial horizon and figure out what needs to be done when. Keep a calendar where you can mark out when it is time to pay your yearly taxes, visit your chartered accountant or review your investments. This will help you by giving you adequate ‘heads-up’ room to prepare your money movements without being caught unawares. For adequate tax saving, you can check out a term plan calculator. If possible, mark out the priority items so that you know what is most important that needs accomplishment.
- Monitor Your Interest Rates: It is not the money that is parked in one place that is the problem. The problem is the invisible eddies and currents that fluctuate around it in terms of interest rates that can cost you the game. Don’t just look at the fixed amounts that you have to juggle around. Pay attention to the interest rates and you will find a range of opportunities that you can leverage to select the best possible options.
- Know thy Net Worth: Life is all about margins, if you subtract what has gone out from what comes in; the amount that is left is all the space you have to play around with. Increases in net worth are indicative of your financial growth and is not buffeted by the effect of operating losses and fluctuations in the way your assets value stacks up against your liabilities.
- Cash-for-Calories: Think about the way you need calories to give you the energy to carry on every day. In quite the same way, cash is to a business what calories are to the human body. Remember the Great Recession of 2008-2012? It was caused by a ‘complete evaporation of liquidity,’ as the media reported during the initial stages of the catastrophe. To put yourself on a cash-for-calories diet you need some amount of self discipline. The essential principle of a cash-for-calories diet is to use as little of lending systems for payment. It’s like, instead of living on the strength of the credit cards you carry, try and manage with just cash and you might change the very mindset that led to the Great Recession. Easy-come, easy-go is still the best cautionary tip you can give yourself to rid yourself of your reliance on credit to get along in life. This will also help you to set specific spending goals for yourself.
- No Mountain Too Big: The bigger the problem, the more is our reluctance to admit it and deal with it. To add to our financial blindside is the fact that events that seem far off on the horizon are actually not given enough priority until they turn up on our doorstep. It’s really very easy to psyche yourself out of the game before you have ever begun. Stop mouthing those negative, victim-in-life mantras that will do nothing but diminish your zeal to deal with the oncoming obstacle.
- Do Your Days Accounts, Say Your Prayers, Go to Sleep: The simple and Spartan habit of calculating what you have spent on during the course of the day will help you to keep track of your bigger financial picture. Keeping tabs on the pennies and paisa in your pocket every day will help you to tighten up on loose change and change your loose grip on your own pocket money.
- Never Assume Unemployment is Something That Happens to Others: The last three decades have seen shortening cycles of recession and recovery. Overnight, seemingly unassailable giants have tottered and toppled. The biggest of brands that have been around for donkey’s years seem to go bankrupt overnight, leaving employees and staff in the lurch and a mess for the government to fix. So do not assume that bad things only happen to others. It’s always a good idea to prepare for the worst. So, save and take a term plan, to prepare for unforeseen contingencies.
So, now you don’t need to wonder how to make your long term plans work. Simply follow these seven principles and do remember to check out a term plan calculator for additional help.