December 12, 2010

Managing Personal Finances

Money is essential to survive and to excel. "Money makes the world go around", as is rightly said.

Managing personal finances or Managing Money is important for personal excellence. Some of the ideas that would be helpful in achieving excellence by better management of personal finances are:

* Maintain a contingency fund equivalent to 6 to 9 months of your monthly expenses in a saving account. You will earn less interest but this amount will be highly liquid for use

* Better still get a premium account opened where the minimum balance is higher but which earns a higher interest. And of course don't consider the minimum balance amount to be a part of the contingency fund

* Save regularly by spending less than what one earns

* Get and remain adequately insured - life insurance, health insurance, home loan insurance, etc.

* Pay the credit card bills in full and by the due date

* Pay all bills by the due date to avoid late payment surcharge

* Pay bills online wherever possible - traveling for bill payment is always costlier

* Create a corpus of savings for post-retirement life - once one reaches a certain age income through employment will generally vanish

* And lastly adopt a frugal lifestyle to the extent possible

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