More and more young job seekers and entrepreneurs are opting to tier own finances these days. However, there are certain pitfalls that should be avoided and some easy paths that can be followed in order to keep pace with finances. Here are some tips that will help keep finances in order, no matter what the business or job is.
- Make a budget
The most important and still the most basic aspect of any finance is to make sure the expenditure and the turnover have been foreseen. This is only possible with a budget. From the household of a single working mother to the conglomerate employing more than a hundred thousand employees worldwide, the simple trick of the trade is to make a budget and then stick to it till the end. The easiest budget is one which takes into account at least some uncertainties and has contingency plans for them. The time limit for a budget depends upon the earning cycle of the person making the budget, for example a person who is paid on monthly basis should make a monthly budget but a person who is paid quarterly will have an easier life if his budget is made as per the quarter.
Another important aspect of controlling finances is to make sure there is adequate saving after the budget has been done. This saving should not be such that it is detrimental to the budget, but must be such an amount that can accumulate over the months. Saving not only helps with any unforeseen incidents, but it can also be used to invest if an opportunity arises.
- Credit cards and loans
The golden rule for credit cards and loans is to make sure that your expenditure never comes near the last 5% of your income. Loans should be taken out only when situations call for them. An important thing to remember is to research credit card companies and banks before committing to one.
- Smart investing
When it comes to investing, the basics are always to invest in something that you have intimate knowledge of and are familiar with. There is no reason to go for the unknown unless the rewards outweigh the risks. Real estate may come in the form of “too good to be true” deals that may lead to a burst bubble at the end. So care should be taken when investing.
- Go digital
Keeping up with finances has been made very easy these days with the plethora of apps that have arrived on the market. Simple to use apps such as DollarBird, Manilla and Expensify are not only free but are extremely powerful tools which even novices can use from day one.