7 Ways to Supercharge your Personal Finances

Everyone has financial goals. What’s yours? Is it to buy a nice condo, or just to manage your personal finance better? In this article, we are going to help you out in getting you back on track to financial health.

Establish a baseline

In this fitness industry, there is something called a baseline. So what is a Baseline? It is a set of few exercises given to determine where you are in your fitness journey. Based on that, you get a new fitness plan, diet plan, etc. For the purpose of this article though, it will refer to where you are in your financial state.

• Check your credit score for errors: You know that you can get a free credit report a year, right? Well, why not check your credit report for errors. Get the help of a professional if you don’t know how it works. Check for errors, and yes there may be errors, is important because these can cause some problems. Errors here won’t affect the score, but the same errors will tell you why your credit score is the way it is.
• See where the money is moving: If you always have money problems at month end, it is never too late to see where you are spending the most. Once you know what is taking up so much of your money, you can find ways to save.
  

Here’s some quick fixes

Here are a few, small and easy fixes which can make a big difference in your financial life.

• Think about lowering your interest rates: If you are paying a lot by way of interest rate, or credit card interest rates, think about getting a balance transfer credit card. This allows you to move over to a credit card which has 0% APR for some months. You can use this time to pay the debt without worrying about the time.
• Set up over-the-limit alerts and low-balance alerts: Missed payments and using up too much of your credit facility will come to haunt you later. To ensure that you always have enough money in your account, think about setting up alerts. Also think of setting up warnings for when you are nearing 30% credit utilization ratio.
  

Improve your stamina

These are ways to maintain your financial health without stress.

• Set up automatic bill payments: If you pay for things regularly, for instance subscriptions, memberships and EMIs for loans, why not set up automatic payments when possible? It is easy to make mistakes without this. Automatic payment leaves one thing less to worry about.
• Make money transfers to accounts that are only dedicated to debt payoff: If you are a serial shopper and splurger, think about opening your separate checking account which is dedicated to that goal only. As soon as you get your salary, automatic transfers send the money over to that account. This way, you’ll always have money to pay your bills, you’ll pay off debts, and will have less money to splurge.
• Have small payments with less-used credit cards: If you have old credit cards you don’t use anymore, don’t throw them off. Use them. Use these to make small transactions to keep the cards active. Shutting down old credit cards affects your credit score.

7 Ways to Supercharge your Personal Finances

Everyone has financial goals. What’s yours? Is it to buy a nice condo, or just to manage your personal finance better? In this article, we are going to help you out in getting you back on track to financial health.

Establish a baseline

In this fitness industry, there is something called a baseline. So what is a Baseline? It is a set of few exercises given to determine where you are in your fitness journey. Based on that, you get a new fitness plan, diet plan, etc. For the purpose of this article though, it will refer to where you are in your financial state.

• Check your credit score for errors: You know that you can get a free credit report a year, right? Well, why not check your credit report for errors. Get the help of a professional if you don’t know how it works. Check for errors, and yes there may be errors, is important because these can cause some problems. Errors here won’t affect the score, but the same errors will tell you why your credit score is the way it is.
• See where the money is moving: If you always have money problems at month end, it is never too late to see where you are spending the most. Once you know what is taking up so much of your money, you can find ways to save.
  

Here’s some quick fixes

Here are a few, small and easy fixes which can make a big difference in your financial life.

Think about lowering your interest rates: If you are paying a lot by way of interest rate, or credit card interest rates, think about getting a balance transfer credit card. This allows you to move over to a credit card which has 0% APR for some months. You can use this time to pay the debt without worrying about the time.

Set up over-the-limit alerts and low-balance alerts: Missed payments and using up too much of your credit facility will come to haunt you later. To ensure that you always have enough money in your account, think about setting up alerts. Also think of setting up warnings for when you are nearing 30% credit utilization ratio.

Improve your stamina

These are ways to maintain your financial health without stress.

1. Set up automatic bill payments: If you pay for things regularly, for instance subscriptions, memberships and EMIs for loans, why not set up automatic payments when possible? It is easy to make mistakes without this. Automatic payment leaves one thing less to worry about.
2. Make money transfers to accounts that are only dedicated to debt payoff: If you are a serial shopper and splurger, think about opening your separate checking account which is dedicated to that goal only. As soon as you get your salary, automatic transfers send the money over to that account. This way, you’ll always have money to pay your bills, you’ll pay off debts, and will have less money to splurge.
3. Have small payments with less-used credit cards: If you have old credit cards you don’t use anymore, don’t throw them off. Use them. Use these to make small transactions to keep the cards active. Shutting down old credit cards affects your credit score.

Confusing Personal Finances - Dealing with Confusing Personal Finances

Perhaps you have already come across conflicting advice on personal finance. One expert or website says one thing, while others say something else entirely. And personal finance is something you cannot ignore. Yet it becomes quite tough with so much conflicting advice. Who should you believe? Who is the real expert? Why is there so much different advice on emergency funds, debt and homeownership?

One reason why you find so much conflicting advice out there is because personal finance is personal. There is no one-size-fit-all solution.

You may get a lot of data and math, yet when the numbers force you to do something that lies outside your comfort zone; it is not a good solution.

So what can one do? How can one make sense of numbers and align our habits and calculations with the official math? This is something we shall try to answer in this article.

First of all, let’s talk about…

Good Debt and Bad Debt

There is no such thing as ‘good debt’, no matter what experts say. There is nothing called good debt even if you use it to pay for college or to buy a house. Dave Ramsey, one of the most well-known financial experts, is one who is strictly against this idea that debt can be ‘good’.

At the other end of the spectrum, Robert Kiyosaki, the writer of the well-known book Rich Dad Poor Dad, says that the wealthy use good debt to grow their financial worth. They use it to invest in cash flowing assets and use money from investors and banks.

Debt Elimination

• Financial experts don’t just disagree on the question of debt, but also offer different advice on debt elimination and debt management. However, here are two most common debt elimination strategies.
• Debt Stacking Method: In this strategy, you start paying off your debt that has the highest interest rate first. As you can understand, many experts swear by this strategy as it enables you to free up cash faster. For instance, if you have several credit cards with debt, start paying off the one that has the highest interest rate.
• Debt Snowball Method: Other financial experts tell you that you tackle that debt first that has the lowest balance. It is believed that a system that is front-loaded with rewards is good for keeping one on track. Small victories keep one going.

Now, paying off those debts that have a high interest rate is certainly a smart move. However, personal finance is not always a math equation. It is also ruled by emotion, in which case the Debt Snowball Method works better. Personal finance is psychological as well.
Should you buy a home or rent a home?

Here’s another field where you’ll see a lot of conflicting personal finance expert advice. Some will say that you are making a big financial mistake if you are not prioritizing your home ownership.

Others say that buying a home is one of the worst financial decisions you can make, and that it is hardly worth the name of an ‘investment’.
More conflicting personal finance advice

Debt elimination, debt and renting and buying properties are some fields where you’ll get different advice. Experts disagree on these issues. However, they disagree on other issues as well, such as using credit cards, ways to build emergency funds, earning more money, purchasing a car, investing and retirement.
Closing thoughts

When learning about personal finance, you are bound to come across conflicting views. When you do, do not let them discourage you, take the advice that is best during the current situation, decide what works now and what will work in the long term, and be flexible enough to change your plans.

Financial Planning Basics - Understanding your Personal Finances

A lot of people think that personal finance is tough to learn and understand that that it is all about the numbers. However, we at mymoneykarma think that personal finance is just common sense! If you are stuck in a rut, remember that there are several tools online that can help you with number crunching. These help you with both simple and complex problems related to personal finance numbers.

If you really are stuck in a rut, or in confusion, remember that the goal of personal finances is to find out your financial goals, and where you want to go in the future. For instance, how much do you want to save? When you pen these thoughts down, you get a direction.

So, first of all, let us see how to get started.
How do you get started on your personal finance journey?

So how do you start on your personal finance journey? The very first thing to do is to learn about personal finance, of course! There’s a ton of resources available free on Google. However, you are likely to find information that is both confusing and contradicting. If that happens, reach out to professionals in this field.

One personal finance and financial planning mistake that people make is that they invest first, and learn by trial and error. It is all right getting the knowledge, but losing money in the process is not recommended. You can make mistakes that are irreversible and costly. Such mistakes such as delaying in good investment schemes can make you miss out on prime compound interest rates.

So here’s what you need to do: take out a pen and paper. Write down your assets on one side, and expenses and liabilities on the other. It’ll help you to plan ahead and budget.
Planning is almost all it takes

When you note down your assets, income, liabilities and expenses, you get a rough estimate on your money management and financial situation. Now, let’s say you want to buy something or invest in something, or even get a new loan. All of these depend on your unique circumstance. It depends on your state of finances, your life goals like marriage, aging parents, education of your kids, starting a business, and saving for your own retirement,

See the points above? Now, plot those according to the time and money needed. For instance, saving money for retirement is a long-term thing yet you do need to start saving money for that. So, how much are you saving for that? Also, remember that the more your income is, the more your lifestyle expenses tend to get.
Get realistic

So, how does all this information help you? It does, in many ways!

First of all, it gives you a real idea  of what you need to do, and what to plan for.

Secondly, it helps you to divide your life phases, and makes them more based on reality.

Think about inflation

Are you a homemaker, an employer, a company owner or an employee? When it comes to inflation, all that does not matter. Everyone gets affected. Taking care of inflation is one of the most important parts of anyone’s personal finance.

News media says that inflation is growing at 5% each year, but in reality it is much more than that. For instance, healthcare costs are growing by 15% to 20% each year while education costs are growing by 10% to 15% annually.
Plan forward with an emergency fund

Right now with the Covid-19 pandemic, a lot of financial experts are saying that it is so important to have an emergency fund. The problem is, it’s too late for that for many people. They did not keep an emergency fund and are now worried. Ideally, an emergency fund should be fed regularly. It can save you from a lot of things like a business loss, health problems, and even from problems related to your work. It’ll help you to sustain your family. Ideally, you should have a 6-month or 1-year’s worth of emergency fund. If you are an entrepreneur, this piggy bank needs to be larger.

Personal finance investing

Investing is a big part of personal finance. Wondering where to invest? Well, there are several avenues, and each is different in terms of returns and purpose. These include:

• Gold and gold loans
• Fixed deposits
• Real estate
• Equity mutual funds
• PPF
• ELSS
  

Think about why you are investing, and for what. It’ll help you to pick an avenue. By the way, don’t put all your money in one category. Diversify your investments.
What about buying a dream home?

Everyone wants to buy a home. It’s on the back of everyone’s mind, thanks to the lovely ads that appeal to one’s need to get a home replete with a swimming pool, a gym, tons of greenery, and more. The problem is that if you invest in buying a home without much thinking, you can fall into a down-spiraling debt trap. This typically happens to youngsters in their 20s. They get a home loan or even a credit card loan.

It is far better to invest through an SIP. At least, it makes you save regularly and give better returns.

7 Ways to Supercharge your Personal Finances - Personal Finances

Everyone has financial goals. What’s yours? Is it to buy a nice condo, or just to manage your personal finance better? In this article, we are going to help you out in getting you back on track to financial health.

Establish a baseline: In this fitness industry, there is something called a baseline. So what is a Baseline? It is a set of few exercises given to determine where you are in your fitness journey. Based on that, you get a new fitness plan, diet plan, etc. For the purpose of this article though, it will refer to where you are in your financial state.

Check your credit score for errors: You know that you can get a free credit report a year, right? Well, why not check your credit report for errors. Get the help of a professional if you don’t know how it works. Check for errors, and yes there may be errors, is important because these can cause some problems. Errors here won’t affect the score, but the same errors will tell you why your credit score is the way it is.

See where the money is moving: If you always have money problems at month end, it is never too late to see where you are spending the most. Once you know what is taking up so much of your money, you can find ways to save.

Here’s some quick fixes

Here are a few, small and easy fixes which can make a big difference in your financial life.

Think about lowering your interest rates: If you are paying a lot by way of interest rate, or credit card interest rates, think about getting a balance transfer credit card. This allows you to move over to a credit card which has 0% APR for some months. You can use this time to pay the debt without worrying about the time.

Set up over-the-limit alerts and low-balance alerts: Missed payments and using up too much of your credit facility will come to haunt you later. To ensure that you always have enough money in your account, think about setting up alerts. Also think of setting up warnings for when you are nearing 30% credit utilization ratio.

Improve your stamina

These are ways to maintain your financial health without stress.

Set up automatic bill payments: If you pay for things regularly, for instance subscriptions, memberships and EMIs for loans, why not set up automatic payments when possible? It is easy to make mistakes without this. Automatic payment leaves one thing less to worry about.

Make money transfers to accounts that are only dedicated to debt payoff: If you are a serial shopper and splurger, think about opening your separate checking account which is dedicated to that goal only. As soon as you get your salary, automatic transfers send the money over to that account. This way, you’ll always have money to pay your bills, you’ll pay off debts, and will have less money to splurge.

Have small payments with less-used credit cards: If you have old credit cards you don’t use anymore, don’t throw them off. Use them. Use these to make small transactions to keep the cards active. Shutting down old credit cards affects your credit score.

And so, there you have it! 7 ways to supercharge your personal finance.

Dealing with Confusing Personal Finances - Good Debt and Bad Debt

One reason why you find so much conflicting advice out there is because personal finance is personal. There is no one-size-fit-all solution.

You may get a lot of data and math, yet when the numbers force you to do something that lies outside your comfort zone; it is not a good solution.

So what can one do? How can one make sense of numbers and align our habits and calculations with the official math? This is something we shall try to answer in this article.

First of all, let’s talk about…
Good Debt and Bad Debt

There is no such thing as ‘good debt’, no matter what experts say. There is nothing called good debt even if you use it to pay for college or to buy a house. Dave Ramsey, one of the most well-known financial experts, is one who is strictly against this idea that debt can be ‘good’.

At the other end of the spectrum, Robert Kiyosaki, the writer of the well-known book Rich Dad Poor Dad, says that the wealthy use good debt to grow their financial worth. They use it to invest in cash flowing assets and use money from investors and banks.
Debt Elimination

Financial experts don’t just disagree on the question of debt, but also offer different advice on debt elimination and debt management. However, here are two most common debt elimination strategies.

    Debt Stacking Method: In this strategy, you start paying off your debt that has the highest interest rate first. As you can understand, many experts swear by this strategy as it enables you to free up cash faster. For instance, if you have several credit cards with debt, start paying off the one that has the highest interest rate.

    Debt Snowball Method: Other financial experts tell you that you tackle that debt first that has the lowest balance. It is believed that a system that is front-loaded with rewards is good for keeping one on track. Small victories keep one going.

Now, paying off those debts that have a high interest rate is certainly a smart move. However, personal finance is not always a math equation. It is also ruled by emotion, in which case the Debt Snowball Method works better. Personal finance is psychological as well.
Should you buy a home or rent a home?

Here’s another field where you’ll see a lot of conflicting personal finance expert advice. Some will say that you are making a big financial mistake if you are not prioritizing your home ownership.

Others say that buying a home is one of the worst financial decisions you can make, and that it is hardly worth the name of an ‘investment’.
More conflicting personal finance advice

Debt elimination, debt and renting and buying properties are some fields where you’ll get different advice. Experts disagree on these issues. However, they disagree on other issues as well, such as using credit cards, ways to build emergency funds, earning more money, purchasing a car, investing and retirement.

Understanding your Personal Finances - Plan forward with an emergency fund

A lot of people think that personal finance is tough to learn and understand that that it is all about the numbers. However, we at mymoneykarma think that personal finance is just common sense! If you are stuck in a rut, remember that there are several tools online that can help you with number crunching. These help you with both simple and complex problems related to personal finance numbers.

If you really are stuck in a rut, or in confusion, remember that the goal of personal finances is to find out your financial goals, and where you want to go in the future. For instance, how much do you want to save? When you pen these thoughts down, you get a direction.

So, first of all, let us see how to get started.
How do you get started on your personal finance journey?

So how do you start on your personal finance journey? The very first thing to do is to learn about personal finance, of course! There’s a ton of resources available free on Google. However, you are likely to find information that is both confusing and contradicting. If that happens, reach out to professionals in this field.

One personal finance and financial planning mistake that people make is that they invest first, and learn by trial and error. It is all right getting the knowledge, but losing money in the process is not recommended. You can make mistakes that are irreversible and costly. Such mistakes such as delaying in good investment schemes can make you miss out on prime compound interest rates.

So here’s what you need to do: take out a pen and paper. Write down your assets on one side, and expenses and liabilities on the other. It’ll help you to plan ahead and budget.
Planning is almost all it takes

When you note down your assets, income, liabilities and expenses, you get a rough estimate on your money management and financial situation. Now, let’s say you want to buy something or invest in something, or even get a new loan. All of these depend on your unique circumstance. It depends on your state of finances, your life goals like marriage, aging parents, education of your kids, starting a business, and saving for your own retirement,

See the points above? Now, plot those according to the time and money needed. For instance, saving money for retirement is a long-term thing yet you do need to start saving money for that. So, how much are you saving for that? Also, remember that the more your income is, the more your lifestyle expenses tend to get.
Get realistic

So, how does all this information help you? It does, in many ways!

First of all, it gives you a real idea  of what you need to do, and what to plan for.

Secondly, it helps you to divide your life phases, and makes them more based on reality.
Think about inflation

Are you a homemaker, an employer, a company owner or an employee? When it comes to inflation, all that does not matter. Everyone gets affected. Taking care of inflation is one of the most important parts of anyone’s personal finance.

News media says that inflation is growing at 5% each year, but in reality it is much more than that. For instance, healthcare costs are growing by 15% to 20% each year while education costs are growing by 10% to 15% annually.
Plan forward with an emergency fund

Right now with the Covid-19 pandemic, a lot of financial experts are saying that it is so important to have an emergency fund. The problem is, it’s too late for that for many people. They did not keep an emergency fund and are now worried. Ideally, an emergency fund should be fed regularly. It can save you from a lot of things like a business loss, health problems, and even from problems related to your work. It’ll help you to sustain your family. Ideally, you should have a 6-month or 1-year’s worth of emergency fund. If you are an entrepreneur, this piggy bank needs to be larger.