Goals Of Financial Management - 4 Personal Financial Goals

 Increase your retirement savings

Are you maximizing your PF or Provident Fund? If so, this is a good time to consider making an increase to this contribution.

The minimum goal for provident fund should be to contribute enough to get any employer in the future to match your current company’s offer. If it is possible, boost your contribution by 10% or even by 15% by the end of this year.

You can contribute up to a certain amount per year, and this amount is tax-deductible. If you are older than 50, you can add another certain amount to build up your retirement egg nest.
Save something for those shopping splurges

 Special days for encouraging shopping sprees and increased consumerism are many. There are days like Black Friday when you are bombarded by huge discounts and price offs. Of course people buy! Even those who are not in the habit of splurging find it hard to stop themselves.

At times like these, what you can do is arrange an automatic weekly transfer of a certain amount to your savings account from the beginning of September. Thus, when Black Friday does come, you’ll have enough funds to buy things.

Understand that the huge discounts only set you up for buying something big or expensive, which mitigates the discount cost for the sellers.
Use technologies to pay off debt faster

Why not let technology help you out? For instance there are tools which let you see when you shall be debt-free based on your current assets and liabilities. Using these can fine-tune your finances in ways would not have imagined possible!

Take help of these tips, and see where it leads…

You can bet it’s someplace better in your fiscal health.

Zero-Based Budgeting - How to Make a Zero-Based Budget?

 What is a Zero-based budget?

This is a method that encourages you to allocate all your money or monthly income to meeting expenses, debt payments and savings. The goal here is simple: income minus expenses equals zero by month end. One of the best things about this budget model is that it is very flexible. You can easily repeat expense categories each month or mix it up, just as you need to. If one month you come under the budget or have more income, keep the balance aside for meeting next month’s expenses, or you can move the excess up in another category too like emergency fund.

Zero-based budget is the same as the Envelope System as a concept, which is all about distributing money for various expense categories.

Nowadays, there are some nice apps that help you to make a Zero-based budget, such as Goodbudget app. If you want to go the free way, just use a Google spreadsheet.
How to make a Zero-based budget?

Before you implement this budget module, there are few ways to make sure you are planning your spending realistically.

Know your income: Total up your benefits, paychecks and all other monthly income sources to find out how much you have to work with.

Track monthly expenses: It is important to know what you are spending on per month. You need to know what you are spending on, or where all the money is going. By scrutinizing your expenses, you’ll see which areas you can cut back on and in which areas you need to spend more.

Categorize expenses: This is perhaps the most important step here. Categorize your expenses and priorities, and that includes your needs and wants, savings goals and emergency fund. This will be very helpful. For instance, if you want to go on a vacation, you can create a Travel Fund. If you want to buy a new car, you save up for that.

How much to allocate to each of these categories?

This is a common question.

Experts suggest that you use the 50/30/20 method here as well. In this approach, 50% goes to meeting needs, 30% towards meeting wants, and 20% towards meeting debt repayments and savings.

Financial Goals - Missed Financial Goals

Whether you planned to save money, take a vacation, or the goal to buy a car, don’t get discouraged if these plans did not work out. If these are still important to you, you can plan for them again, and even better than last time now that you have learnt your lesson. Life happens.

Here is now you can get back on track.

Embrace your failure: We all have problems, but the very first trick for getting out of the mess is to focus on the bright side of things. And yes, all problems have a bright side, silver lining, and opportunities. All you want to do is to find and focus on these. Let’s say you did not manage to save as much money as you thought. Yes, you’re back when you started, with the same old bank account and basic amount. But now you know what did work and what did not. You can now get serious about saving. Setbacks are learning opportunities, all of them. If something did not work out your way, find out why that happened.

When you do reach that goal you’ve set for yourself, or did not, it is essential to study your spending habits and compare it to your budget. This can work wonders.
     
Make adjustments: So you have made a mistake, but did an audit of your personal finance as well right after the debacle. Did you cut your budget as far as possible? If so, it can be time to make more money. This can be till you reach your financial goal. For instance, if you want to go on a vacation, consider taking a weekend job, or things like babysitting or even a side hustle. These shall help you to make more money, which means more money saved.  The other thing you can do is to make compromises. If the goal you set is too far-fetched, consider a cheaper option. Instead of a foreign trip, consider a local one, for instance. No matter which strategy you take, do avoid debts. Achieving life goals does not mean you should be drowning in debt after that.
     

Cheer yourself: Monitor your progress during the journey to achieve your goals. Keep a tab on your finances, as often as it is comfortable for you. You need to analyze and adjust.

Budgeting Mistakes - Mistakes You Are Making In Your Budget

 The biggest mistake you make is to not make a budget in the first place, especially at the unprecedented time we are in right now. In this article, we are going to tell you some of the most common and problematic budgeting errors people make, and how you can avoid making them. When you do have a budget, it is easier to be away from monetary blunders than when not having one.

The biggest mistake you make is to not make a budget in the first place, especially at the unprecedented time we are in right now. In this article, we are going to tell you some of the most common and problematic budgeting errors people make, and how you can avoid making them. When you do have a budget, it is easier to be away from monetary blunders than when not having one.

Failing to track your expenses: It is essential to be accurate in your budget if you want to make progress towards your financial goals. For this, it is important to track your spending. Failure to keep track of this will bring you one step close to failure. Most people do not stop to take stock of how much money a month they have wasted per month on frivolous things, such as fast food. They underestimate their expenses, and thus, at the end of the month they find they had overspent! What you need to do is to keep track of what you are spending, for at least one month before making a budget. Ideally, keep track of expenses each month.

Neglecting retirement: This is more common than you think. People become so engrossed or busy in their day to day lives that they neglect their retirement, or rather planning for it. Here’s the thing though. The sooner you start saving for your retirement, the easier it shall be then the time to actually retire. It doesn’t matter whether you are a middle aged person or a teenager. Saving up for your retirement should be one of your biggest priorities. Most people think that saving for this is sacrificing money which they need at the present, but experts say that is doing it completely wrong! The money you save now will be paychecks after retirement. At a minimum, think about setting aside a part of your salary per month to meet your employer’s Provident Fund contributions. Make it a goal to save 15% of your income for your retirement.

Not having an emergency fund: This is a major problem for many. A lot of people do not save for an emergency fund. When you have an emergency fund, there is no need to use your credit card to get fast cash at a huge interest rate. If, right now, you do not have an emergency fund, make sure to set aside a certain amount per month for this purpose.

Make sure you are not making these mistakes. We at mymoneykarma are always here to help you out on your personal finance. It is essential to be accurate in your budget if you want to make progress towards your financial goals. For this, it is important to track your spending. Failure to keep track of this will bring you one step close to failure. Most people do not stop to take stock of how much money a month they have wasted per month on frivolous things, such as fast food. They underestimate their expenses, and thus, at the end of the month they find they had overspent! What you need to do is to keep track of what you are spending, for at least one month before making a budget. Ideally, keep track of expenses each month.

Neglecting retirement: This is more common than you think. People become so engrossed or busy in their day to day lives that they neglect their retirement, or rather planning for it. Here’s the thing though. The sooner you start saving for your retirement, the easier it shall be then the time to actually retire. It doesn’t matter whether you are a middle aged person or a teenager. Saving up for your retirement should be one of your biggest priorities. Most people think that saving for this is sacrificing money which they need at the present, but experts say that is doing it completely wrong! The money you save now will be paychecks after retirement. At a minimum, think about setting aside a part of your salary per month to meet your employer’s Provident Fund contributions. Make it a goal to save 15% of your income for your retirement.

    Not having an emergency fund: This is a major problem for many. A lot of people do not save for an emergency fund. When you have an emergency fund, there is no need to use your credit card to get fast cash at a huge interest rate. If, right now, you do not have an emergency fund, make sure to set aside a certain amount per month for this purpose.

Make sure you are not making these mistakes. We at mymoneykarma are always here to help you out on your personal finance.

Pay Yourself First - What is the Pay Yourself First Model of Budgeting?

How the Pay Yourself First model works

This budget model is such that it prioritizes savings, but that should not be done at the cost of sacrificing necessary expenses like utilities, housing, insurance, and the like. To make the Pay Yourself First model, here is what you need to do.

Assess your spending patterns: Just like everything else in life, you need to prepare if you want to make the Pay Yourself First model successful for you. Experts recommend that you review your latest spending patterns and details, including that of your bank and credit card. Start out conservatively since you can increase your savings later anytime. What you don’t want to risk is an overdraft or a bounced check.

Find out how much you want to pay yourself: Here is where it all gets interesting! Use the 50/30/30 planning model. Under this planning model, 50% of your monthly income goes to necessities, 30% to meeting wants, and 20% towards meeting debt repayment and savings. If you use this planning model per month, you’ll be surprised how much you save.

Find out what your income goals are: Make a list that shows what your short term and long term income goals are. Your first priority should be to save up for your retirement and to build your emergency fund. The next priority should be towards travel and major purchases. Contribute just a small amount towards each goal. Alternatively, you can focus on a couple of goals first, and once they are done with, focus on others. But first, you need to find out how much you need to save up for these goals. Saving for all of them won’t be equal, which is why the 50/30/ 20 method is so effective.

Be flexible: This means that you should adjust when you need it, and not be rigid. When it comes to your budget, do anything but be rigid. If you feel that you are not saving up enough for something, cut back on others if it’s so important.

50/30/20 budget - How Much Can You Spend Every Month?

 What you want is less money going out than coming in. In other words, your expenses need to be less than you’re your net income. Thus, before you think of buying something substantial, create a budget which takes care of your wants and needs.
How much should you spend?

When it comes down to your spending, it will be a good idea to use the 50/30/20 budget. When you use this formula, you can devote 50% of your net income to meeting needs like insurance and rent, 30% towards vacations and gym memberships, and 20% to things like savings and debt repayment. As you can see, your needs come before your wants, and what you spend always depends on how much you earn.
Start with your net income

At the end of each month, or at the beginning of the next month, you get your salary. It may look like a huge sum at first, but there is a limit to how much you can buy with it or do with it. That is why you need a budget. Now, start with your net income, which is your income after payroll deductions and post-tax deductions. The sum you arrive at now tells you how much you can afford to spend on things, from groceries to rent to gym membership.

But what if the money is not enough? Well, it won’t hurt to ask for a raise at work, get a promotion, change your job to one with a higher salary, or even take up part-time work in addition to your day job. If you want to cut back on current expenses, there are a few things you can do. For instance, you can do carpooling instead of using your own car each day. You can use coupons to bring down prices as well.
Pay the necessities first


If you spend on everything you like, you won’t have enough for the things you must have. For instance, you spend on an expensive gym membership and find you don’t have enough for rent. So here’s what you need to do. Start with giving 20% of your income towards meeting needs. Pay yourself first, and then set money for retirement and emergency funds. Once this is done, go to meet your debts. Have outstanding credit card debt? Tackle these next!

The next thing to do is to subtract all your regular bills. For instance, if your monthly net income is Rs. 50000, spend no more than 15000 on utilities, rent, food and the like.
Leave room for wants

A budget that caters to just needs may not be sustainable for the long run. You need to see your wants as well. That is why you may want to dedicate 30% of your income towards it.
Be flexible

Be flexible and open to options. Whether you are moving to a new city or whether the cost of living in your hometown has increased, it all depends on your income and expenses. If your expenses are high, do check your budget and spending habits.

Missed your credit card payment - What to do with Missed credit card payment ?

Here are some of the actions you can take if you have missed your payment options:

Settle the Account : When you realized that you missed a payment a payment then pay it immediately.if you cannot the full amount then pay the minimum required payment.A card-issuing companies report delinquent payments when you are more than 30 days late.Pay the dues before the next bill arrives. However, you must know that there is no guarantee that this will work. There is a chance that the company might report it the moment you fail to pay.

Ask for a Waiver : When you miss a credit card payment, a late fee will certainly be added to your outstanding balance. Late fees can be very high and you should try finding a way to avoid it. Many creditors will be willing to waive your late fee if you have a history of regular payments. Contact the issuing company and explain your situation to them. Try to convince them for a waiver politely. Don’t be shy. Don’t be demanding either. If they don't agree, do not pursue it further. Learn a lesson, pay the fee, and be resolute that the mistake won't be repeated.

Set Reminders : If missing a payment was an accidental one-time issue, then hopefully you already have an organized system for reminders. However, if you notice that you keep defaulting now and then, you need to be more vigilant and find a way to remind yourself. You could put up a monthly bill payment calendar on the wall, listing all the due dates and the minimum payment amounts for all your accounts. This might sound archaic but has proven to be a useful technique that has stood the test of time. I assume you are a tech-savvy person; so you might prefer setting up reminders on your phone. Email reminders could also do the work - you could try FollowUpThen for this purpose.