Ladder of Success: Golden Rules for Begginers

Share your this to your friends!

Do you know some steps of financial planning? Are you aware of it? Is it okay for you to read some of it? Does it helpful for you? Here are the Top 10 Golden Rules for beginner according to the site of Cleartax.

First, manage your Money. Managing your money is not that hard, you don’t need insane knowledge about finance, managing your money only needs you attention and your commitment to it. In managing your money, this is also where saving comes in, saving your money is your first step in managing your finance. Now saving is a habit that you learn early in your life, so you either practice it a lot or not. This helps you in the future because it’s easier for you to save. Saving helps you to achieve life goals and saves you from falling in debt. Second, regulate your expenses wisely. If you are getting short on your finances every month and having a hard time to control where you spend your money. This quite a problem for you, but there is a solution for this situation. The simplest solution for this, is create your own budget. Not having a budget is like having a bottle with a hole below it, letting the water flow without control. Budgeting shows you where your money goes, and you decide how to spend it. You start categorizing your expenses then cut out what you think is not beneficial to you, therefore saving and managing your finance. Third, maintain a personal balance sheet. Creating a balance sheet for yourself will be useful in your financial planning. In the balance sheet you can write down your assets and liabilities, the difference between the two will be your net worth. After listing your assets and liabilities, take all the sum of your assets to get the total of your assets, then for your liabilities do the same to know how much money you are losing. Having a positive net worth is what you’re aiming for, having more money you own rather than more money that you are losing is good. Having a negative net worth is also fine, because you are going to pay your liabilities and your net worth will increase in the end. Fourth, dealing with surplus cash judiciously. Investing is a good way of preparing yourself in the future when you retire. As time goes by, inflation affects everything and if you pass on investing your money will not grow and expand. Now if you have extra cash, you can consider it for investing, investments are a good way to expense your extra cash and counter the inflation. Investing early is better and when the time comes you can lead this investment to your life goals. When investing, you must determine first the category of your goals, is it short term, medium, or long term, this can help you better to choose where to invest. Fifth, create your personal investment Portfolio. Creating your own personal investment portfolio is a great achievement already. Distributing your investment among your asset classes like your equity debt and cash is part of constructing your portfolio. This is what you call asset allocation. You need to be wise where you put investment. Being a long-term investor is always better because you can generate better income as time goes by. After constructing your portfolio, you need to keep it in check or rebalance it to keep the risk within the expected limit due to the market fluctuations. You can do this thing every six months or even a year after. Sixth, planning for Retirement. We are always thinking of our future that is why planning our retirement is also part of our future planning. As you grow old, you will be vulnerable to illness and different health problems. Now you to earn you own money for that situation. If you are thinking that planning your retirement now is too early, but if plan your retirement late will cost you some problems in the future and you will generate lower income of what you are supposed to get. To plan your retirement, you should determine first what age you want to retire, and after that you need to calculate how much money you need to earn to meet your post-retirement expenses. Seventh, manage your Debt wisely. Getting sunk in debt is a big problem. If your debt gets out of control, you will have a hard time to manage your finances and will get caught in different debt traps. That is why we talked about saving a while ago. Saving will save you from having too much debt, plus it will consider debt as your last resort since you have savings. If you already have debts, make sure to make an allotted time and how much money you will pay. Then you cross out your debt one by one and as time goes by your debts will be paid. Remember it’s important to pay your debts and consider having a debt as your last choice. Eighth, get your risks covered. Your life and the things you own will pose risk in the future. These risks can put your financial state in grave situations and will cost you your money. Having insurances can ensure your finance preservation. Applying to a life insurance is a good decision. But before that, you can compare different insurance, this can help you decide and determine which one fits your budget and what you can afford better. Now having a life insurance can secure you a high-quality healthcare services that you can access for just reasonable prices and will enable you to get out of the risk. Ninth, planning your Estate. Each people have their own estate, it can be your car, home, or even your unspent cash laying around. When the time comes you must decide what happens to these. Planning your estate is totally appropriate for you, deciding where your assets go is important as well, you don’t want to leave it at the wrong individual. As you generate your own assets, it is clear that you can start already planning your estate. Prepare a list of your assets, distribute it to you beneficiaries. Then create a will to solidify this, so that there will be no problems when the beneficiaries get your assets. Tenth, planning your Taxes. Paying your taxes is part of life as you earn money and create transactions. Now it is important that you take note of your taxes so that you know what you need to pay. It is also advisable to analyze your finances with your taxes. You must avoid getting involved in tax evasions or avoidance as it poses a threat to your future.

Share your this to your friends!

Leave a Reply

Your email address will not be published. Required fields are marked *