Most people don’t really know much about how to manage their finances. Even if you are a student of finance, there’s a very distinct line between learning how to manage your personal finances and that of a company. Studies have shown that a significantly large portion of the population is stressed about money. According to a private survey, money is one of the top stress factors in the world. The question is, does this really have to be the case? Is it really necessary for you to work all your life just to survive?
Most people don’t understand money at all. The popular mindset is that a person works for money. However, ask any rich individual, and they will tell you that the money works for him or her. In the following few paragraphs, you will find out some important tips on how to manage your finances in a better way.
Use an Online Service
Services such as Plenty offer free financial advice online to their clients. Depending upon the situation that you face and the amount of money that you require, the financial experts will draw up a tailored savings plan for you. They will give you a bird’s eye view of the total amount of money that you have in the bank, thus making it easy for you to get an idea about your liquidity.
Once you have a clear picture in your head, Plenty will give you a tailored financial plan on how to manage your finances. The recommendations mentioned in the plan factor in your personal life, your entertainment, and other spending habits. This will make it easy for you to follow the financial plan without having to make a lot of lifestyle changes. The company will also follow up with you to ensure that you stick to the plan.
Live Below Your Means
One of the biggest mistakes that many people make is that they continue to raise their living standard as they start making more money. If you really want financial independence and wish to get rid of your financial troubles, you need to start living below your means. You will reap the benefits at the end of the month, when you will have more money to spare. Having a healthy savings account is very important. Progressive millennials try and save up to 50% of their income. Now, it’s obviously difficult to save up to 50% of your income.
No worries, however. Even if you can’t save half of your income, you should set a goal to save around 20% at least. Whenever you receive your salary, you should take out your savings first and keep them in a separate account. Make sure that you do not touch your savings at all. It will be difficult for you in the beginning to exercise financial discipline. However, if you adhere strictly to your routine, you will soon have a sizeable nest egg at your disposal. Just make sure that you take out your savings in the beginning of the month.