Right from childhood, small amounts of pocket money from parents have taught the management of petty expenses. This in itself has given the concept of personal financing in daily lives. In adult lives, personal finance management takes place in a broader way. Personal finance constitutes of petty expenses, liabilities, savings, future plan and emergency expenses. So, a little planning needs to be done for proper financial management. Also, updated information regarding new investment options will help in saving money.

Chalking Out Personal Needs

As the saying goes, every penny saved is a penny earned, with proper budgeting, even with a nominal earning, you can lead a decent life. The aim should be to plan the future and take care of all medical and other emergencies. The most important factor that to be taken into account while planning your personal finances is your personal need. The needs and desires vary from person to person. Thus, personal finance has to be done individually and cannot be generic.


First and foremost, chalk down your expenses. This should include your monthly petty expenses, household expenses, liabilities etc. Liabilities too need to be planned. For example, if loans have been taken, there are various tax saving schemes offered on loans. On home loans, the principal and interest rate amounts have the tax waiving opportunity. Similarly, tax is waived off on education loans. While opting for home loans or education loans, pay as much cash as is possible, as large amount of loans also mean large amount of interest paid to the bank.

Note down your monthly household expenses. If the expenses are jotted down, a lot of unnecessary costs come to light, which can be cut down. Along with this, for more accurate expenditure list, daily expenses can also be jotted down at the end of the day.

Saving Methods

Savings is one of the most important aspect of financial management. Inform yourself as much as you can on the various saving schemes available. Some common savings tools are bank fixed deposit, simple savings accounts in banks, mutual funds, stock purchase, commodity trading, bond purchase etc. There are innumerable mutual funds, stocks, commodities available in the market. Not all of them are profitable though. Losses can also be incurred on them.
You need to be extremely alert and educative on the financial market. You can even take the help of colleagues, friends or family members to educate yourself financially. But always remember, you need to rely on your judgmental power in such matters. The economic market very often depends on the socio- economic and political structure of a country and globally. So, it would be wise to be updated on current affairs as well.

Future Planning

A little more planning can deal with your dreams. For example, if you have been planning a dream vacation and have been putting it off for a long time due to lack of funds, have heart. With a little more planning, you can set aside a portion of your money for planning vacations. Even some furniture or home appliance can be purchased in this manner. Such savings can be done in commodity trading, stock trading or even mutual funds for a short period. But extreme caution need to be exercised, as very stable blue chip shares need to be chosen which will give a guaranteed return without fail.

Next comes planning for the future. Savings should be made for medical emergencies in the form of medical insurance policies. Before purchasing and medical insurance policy, go through their plan very carefully and note which one would be the best for you. It usually varies with age. Those not employed in government organizations should get a pension plan policy which will take care of post retirement monetary expenses. Next in line is a life insurance policy. In case of accidental death in the family, the policy will take care of the insurer’s family expenses. Some life insurance policies offer good tax saving opportunities.

It can be concluded that personal savings is the most important factor of growth, as however much you earn, if you are not a smart finance manager, there will be no growth in life. Thus, personal finance management is directly related to your growth as it helps in maturing the goals of your life.

Author's Bio: 

Make a proper financial plan which will help you enhance your lifestyle and financial conditions. You can check out more tips here at http://loanpiggy.com.