The first rule of personal finance is that it’s not personal and it’s not financial. It’s about your ability to make ten changes and not get too depressed over it.James Altucher
Who doesn’t want financial freedom? Almost everyone desires to be delighted with their basic needs and hobbies.
The main impediment of fulfilling the wants is money. Personal finance is crucial in your life.
So, you need to know how to manage it. But can you manage your money? Are you an accountant? Or, are you an auditor? If you’re not any of them, it would be tougher for you.
Here we’ve arrived with the new term next generation personal finance. It will help you with managing your finance. Stick with us to learn perfectly.
What Does Next Generation Personal Finance Management Mean?
The term refers to the skill of managing and organizing your capital for a better future. It also improves your thinking about savings and expenditures. Truly speaking, it motivates you to be solvent in life.
It gives you full control over your earning, costs, budgeting, debts, insurance, tax, banking, etc. Additionally, this unique skill also helps you to make a better retirement plan.
9 Simple Rules to Follow
- Maintain a Balance Between Your Earning and Expenditure
- Lead a Simple Life
- Live on Your Budget
- Build an Emergency Fund
- Avoid High-Interest Debt
- Go for The Insurance If Needed
- Wisely Invest Your Money
- Start a Side Business
- Use Technology To Manage Your Next Gen Personal Finance
Maintain a Balance Between Your Earning and Expenditure
Life is all about maintaining an exact balance everywhere. Personal finance management is not an exception to this reality. Proper balance ends in higher productivity. On the contrary, imbalance causes grim suffering. That’s why you must balance your earning and expenses.
Beware of Little Expenses; A Small Leak Will Sink a Great ShipBenjamin Franklin
Spend less than your earning- is the first rule of your next-gen personal finance management. This practice will bring about a complete difference in your personal and professional life. By doing this, you can ensure a less risky future.
Tips to Balance Earning and Expenses
- Know Your Income & Expenses
- Trace Your Money
- Measure your total expenditure with your total earning
- Recheck Your Expenses
Lead a Simple Life
Simplicity is the best part of living. The more complex your digital lifestyle is, there are more possibilities that you end up with a mess. If you have more than one credit card, chances are you may forget the payment date. Even you may be the victim of identity theft.
Similarly, more investment accounts will distract you from keeping an absolute focus on any specific one. It may cause great harm to your finance.
Besides, all the processes will take a lot of time and energy. It is pure wastage of your productive hours.
So, keep everything as simple as possible. It will help you to stay in track.
Live on Your Budget
A budget is telling your money where to go, instead of wondering where it went.John Maxwell
A budget is an essential tool for managing your personal finance. But the question is how to create an effective budget. Don’t get panicked because it’s quite simple. You should keep records of your income and expenditures for the few last months. You can use a paper to-do list notepad for documenting the process.
Track your cash payments, credit card details, and bank statement for identifying your expenses. Set your monthly financial targets like investment and saving. Prepare a list of all your costs and categories them according to necessity such as clothing, housing, food, health, utilities, etc. However, thanks to modern technology that offers you software for creating your budget.
Besides, you can read the following article to learn how to live your life based on budget.
Build an Emergency Fund
All days are not the same. Save for a rainy day. When you don’t work, savings will work for you.Unknown
As you don’t know when the urgency will appear, it is better to stay prepared. But unfortunately, we don’t follow this life-saving technique. According to a survey in 2018 by the Federal Reserve, 40% of adult Americans cannot cover only $400 as an unexpected expense.
Therefore, you must plan for accidental issues. What will happen if you have to suddenly pay $2000 for repairing your home? Have you enough cash to support your family if you lose your job without any notice? Can you afford the cost of health risks?
You can face all sorts of unexpected happening by raising an emergency fund. It will shield you at the time of danger. You won’t have to use your credit cards, borrow at high interest, or sell something valuable.
Tricks to Build an Emergency Fund
- Make a budget
- Determine a monthly savings target
- Find another source of income
- Reduce your bills
Avoid High-Interest Debt
Debt is a dream killerKerry Hannon
Next to an emergency fund, elimination of high-interest debts should be your main focus towards the next-gen personal finance management. So, make a smart plan for paying those debts. At first, prepare a list starting from the most charged one. Double your monthly payment if possible. After mitigating this one, go for the next following the same strategy.
In this way, you can manage your personal finance by repaying the high interest debts.
Go for The Insurance If Needed
Life is uncertain. You don’t know what will happen next. So, you should choose efficient insurance plans to face unpleasant occurrences.
Try to insure everything you think reasonable to, such as life, home, car, education, property, etc. After buying your policies, maintain regular contact with the insurer. You should even look for another company that might offer you better opportunities for the same policies.
Most importantly, while selecting an insurance company, judge critically their performance.
Tips for Choosing the Right Insurance Company
- History or reputation of the company
- Pricing criteria
- Financial strength
- Availability of discounts
- Referral powers
Wisely Invest Your Money
You may ask why personal finance is important. The answer is, it teaches you to invest smartly. Your today’s decision will affect your future. The following quote will clarify your sense of investment.
Never invest in a business you cannot understand.Warren Buffett
Therefore, think again and again before investing your money. But you should not fear the risks. Without taking risks, you can take any initiatives.
Start a Side Business
Don’t put all your eggs in one basket.
The quote reminds us that you should not invest all of your earnings in the same purpose. It increases the risk of return. On the other hand, if you establish a new way of earning, you can boost up your productivity over days.
However, you may start a side business that reflects your passion. When you pursue your dream can definitely shine.
Use Technology To Manage Your Personal Finance
Naturally, you become tired after the long workday. Sometimes, you cannot even look at your bookkeeping due to your busy schedule. Under this circumstance, it appears to be impossible to take care of your accounts. But now you can stay up-to-date by using the best accounting software for personal finance.
The tools save your time by simplifying your tasks. They, generate a full overview of your accounts so that you can gather complete knowledge. Thus, they take you one step ahead in managing your finance.
Advantages of Accounting Software in Personal Finance
- Fast and easy data entry
- In-depth financial reports
- Reduction of manual errors
- Saves time
- Saves other maintenance costs
How can I improve my personal financial position?
You can apply the following techniques for controlling and developing your personal finance.
Read Personal Finance Related Books
Decrease unnecessary bills
Plan your daily and monthly meal
Pay your debt
Make good relation with neighbors
Share your dream and plan with your partner
Avoid using credit cards
What to do in an unfavorable financial situation?
You can do the following things when you are in a financial crisis.
Don’t get panicked
Control your whim
Dive into saving
Borrow from a reliable source
Establish a long-term plan
What are the steps for creating a budget?
Figure out your income.
Calculate your expenditure.
Set realistic financial targets.
Earn more, spend less
Stick to your plan.
Final Verdict on Next Generation Personal Finance
Next generation personal finance is not a term wiry, as you thought. Implement all the above examples of personal finance in your empirical life for a healthy future.
We hope that the tips would really help you in determining where to spend and where to not.
So what’s next? Comment below what really amazes your financial thoughts. Share the article with your community to help them manage their personal finance.