Tips on efficiently using finances for personal use –
1.Spend Less Than You Earn –
Expenses should always be the amount left after investing smartly and keeping a fixed amount aside to constitute as savings .
Monthly income = (1st preference ) savings + (2nd preference) investments + (3rd preference) expenses
2. Learn to Budget –
A popular and effective way to budget is with the 50/20/30 Rule , where 50% of your income goes towards the necessities like the household expenses , 20% of your income goes solely towards savings and the remaining 30% can be used for whatever you wish to spend on like lifestyle expenses etc.
3. Pay Yourself First –
Pay yourself first is nothing but investing in your financial future; you’re investing in future you, and future you will thank present you paying you first meaning keeping aside a sum amount for your future self .
4. Have an Emergency Fund –
You can’t predict an emergency, but you can be prepared for one. Emergency fund is nothing but an fund kept aside preferably in ones bank account to be used during an unforeseen event . This fund should amount to around 3-6 months of one living expenses along with the living expense of dependent members .
5. Side Hustle to Make More Money –
No one is happy with the amount of money they take home each month . Hence to little bit of extra cash may take us a long way . So why not try to earn the extra penny along with the current ongoing income through a different source by pursuing a hobby or investing etc. Side hustling is just widening ones source of income and channelizing income from various sources possible .