Thursday, September 11, 2014

Financial Planning Tips For Individuals

By Kerri Stout


Lots of people are having difficulties making both ends meet. They feel that even though they have worked a lot, their earnings are still not enough to support their families and themselves. Since this is the case, they typically ask their banks for loans as well as have their credit cards maxed out.

An individual and his family needs enough finances in order to acquire the basic necessities of life, such as food. It may also be a basis for his success or downfall. In this case, there are several financial planning Rockland MA pointers that are provided to help him in the realization of his future plans.

An individual should set savings as the first priority. Ideally, it should comprise ten percent of the total salary he received. He can then put it in a savings account of his bank. This way, he will be able to save for his retirement and also be on his way to becoming independent financially.

He should also be setting aside an emergency fund. Three times the monthly expenses should be saved by a single person. On the other hand, six times the monthly expenses should be on a married one. In cases where tragedy befalls his family or he lost his job he can turn to this fund and get the money from there to buy food and pay off rent.

Debts are usually a part of the daily life of a person. For this, his debts should be paid off as early as he can. The interest of his debt increases day by day, on top of the original amount. If he pays it early, he can catch up with its growth. Aside from that, he can also save money for other purposes which are long term in nature.

A person should be able to take note how much he is spending monthly. He should be aware of how much is his house rent, his groceries, fuel, or other items. In this manner, he will have an approximation of how much he will be spending for the succeeding month as well as have his finances budgeted.

His computation of his expenses for the current month will affect the budget that the person will be setting for the succeeding month. Priorities should be set regarding what item needs to be paid first. His budget should be flexible, though, as other scenarios may happen along the way.

People usually spend a lot to purchase newer items such as shoes, clothes, and gadgets. They also spend for eating in fine dining restaurants a couple of times. These are typically more than what they are getting for their salaries. With this, they should try to live in simplicity. They can certainly pamper themselves but they should do it wisely.

They can also invest portions of their salaries for several investment funds. Lower returns can be expected out of low risks investments while higher returns can be expected out of high risks ones. Whether he chooses the low risks or high risks ones, they can help him in earning more money and make him financially independent.




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