In this post we continue with the second and final part of the best strategies of personal finance.
Borrow Only When You Can Repay
While credit cards can be a serious debt trap, it would be rather unrealistic to not own one in today’s contemporary world. Also, they have applications simply beyond buying things. Proper use of credit cards help one build a credit score that later on plays a crucial role in the loan availing process.
Credit cards need to be managed correctly which implies paying off your entire bill amount every month by the due date. Always avoid paying the minimum due as it can lead to humongous amount of interest.
Monitor Your Credit Score
Monitoring your credit score is yet another integral part of personal finance strategy. Your credit score is a measure how responsible you are with your borrowed finances. Having a credit score of 750 and above is considered good and it exhibits financial fitness. It gives lenders to view you as worthy. In turn you can get a better interest rate on loans. Remember to keep a check on your credit score at regular intervals.
Plan Your Future Accordingly
Having your future planned properly is very essential – whether it is about retirement planning or writing your will before death to ensure that things fall in place after you leave this world. Look into insurance and find ways to reduce your premiums preferably for things like home, auto and other long-term ones. Periodically review your policy to ensure it meets your family’s needs through life’s major milestones.
Remember to Buy Insurance
Buying insurance is of utmost importance. As you age, it’s often normal for you to accrue many of the same things your parents did—a family, home, belongings, and even health issues. Insurance can be expensive if you wait too long to get it. Health insurance life insurance; it all increases in cost the older you get. Hence, remember to buy insurance when you are young so that you can end up saving on the premium.
Learn to Maximize Tax Savings
When it comes to paying taxes or availing tax benefits, a lot of people end up doing things the wrong way. Many people leave hundreds or even thousands of rupees sitting on the table every year. BY maximizing your tax savings you will end up freeing money that can be again used for investment purpose. Ensure that you start saving receipts and tracking expenditures for all kinds of possible tax deductions.
Give Yourself a Break
Planning and budgeting about personal finances can become tiresome at times. Do remember to reward yourself every now and then. This will act as a booster to help you take the next steps. Whether it’s a slightly big-ticket purchase or a vacation that you had been intending to take since long or a dinner at a high-end restaurant—do indulge in occasionally. This will give you a taste of financial independence that you are working so hard for.
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