If you have any kind of financial emergency, having an emergency fund in your savings account is always helpful to cover the needs. Many people borrow money from their friends, family members, getting cash advance from their employer or getting a loan at very high interest rates. If you are falling short of cash and you know the payday is still a few days away, there are ways to bridge the gap.
Most of the people live from one paycheck to another paycheck and this is certainly not a good way of living life in this expensive world. Many students when they step out of the college get overwhelmed by their student loans and they feel like they will never come out of it. There are ways to resolve all kinds of financial problems by personal finance planning.
It is very important to prioritize your personal finance. The examples mentioned above are just a way to resolve the financial dilemma. What happens if you have already used your savings account and you don’t have anything left in it? What happens if your boss, your family or your friends are not willing to offer you any more advance.
These are tough economic times and that’s why it is important to do a proper planning of your personal finances. If you are an average earner and you live life way beyond your means, you will not have any money left just in case if some kind of emergency happens in your family. It is quite possible that you might be already overwhelmed by your existing debts at that time. Here are a few tips that everyone should follow, just to give a head start.
The most important thing in life is to live within your means unless you can afford to go beyond it. With the easy use of plastic money, you might get tempted to buy the new gadget that you always wanted to have or you want to pick those trendy clothes in the store that you just “must have”.
When you are driven by such kind of temptations, wait for a moment and think that you may get that item easily by using the credit card. But do you have the money to pay back your credit card bills within the due dates.
Monitor the ins and outs of your finances and have a savings plan. This is another crucial part of planning your personal finances. Always try to stick to a monthly budget and don’t increase your debt to income ratio. If you have little money left, then you should not be spending any more than you have to.
Another important way of planning your personal finances is to have a perfect control on the use of credit cards. Excessive use of credit cards more than your income will not only put you in the debt trap, but will also spoil your credit ratings.
With these personal finance planning tips, you can sharpen your money management skills and experience the financial freedom that you deserve.