Tips for personal finance management

Personal finance management might challenge you today. However, if you accept this challenge and move in the right direction, it pays off with a higher span. In this article, we’ll discuss certain tips that help to manage personal finance effectively. Let’s do it.

1-Always keep your expenses less than earnings.

It’s obvious. Your current earnings must be higher than your current expenses irrespective of the fact how much savings you got. However, if you are a seasoned professional, things might be different for you. In this case, there is a need to calculate your average monthly income and then compare it with your current expenses. So, always make sure your expenses are less than your income.

2-Track expenses on a daily basis

Start writing your expenses on daily basis. It might be challenging at the start. However, once you start writing, this helps to enhance your expense writing habit. One pro tip is that ‘’write expenses on the same time each day, this will help your mind to be a habitual expense writer. Although, your mind may not perceive expense writing a useful activity. However, that’s not true. Once, you get sufficient expense data, it will help to identify your personal expense pattern. For instance, at the end of the month, you might notice unusual expenses in the category of leisure expenses. Although, you may not recover the written expense. However, your mind will process this information and try to avoid low value adding expenses in the future. So, it’s all about feelings.

Here, your mind might trick you. It may ask you why I should write daily expenses. Do I have to get reimbursement from someone?

Believe me, it’s a trap as the human mind always wants to remain in a state of rest and relax, where it does not have to do anything.

So, make a commitment to yourself. Please remember, personal finance is not only about your future but the future of your dependents. Please note try to assign a category to each expense that you write. For instance, there can be categories like grocery, self-care, transportation, child education, health care, and entertainment etc. There may be some more categories and if you add/less something from the list, that’s absolutely fine.

3-Make a monthly budget

Making and implementing the budget can really help in your journey to managing personal finance. It’s the best way to avoid emotional expenses. Basically, it happens like this when you think to make a certain expense, you ask yourself one question, it the budget available for this expense?

Your mind might say yes. However, you immediately ask a second question, ok, how much budget? In this way, your mind becomes habitual to thinking before making expenses. You also start to realize that you’ll be writing expenses at the end of the day and you don’t want to be sad by writing expenses that do not add significant value to your life.

Additionally, try to make categories for the budget. For instance, allocate x amount for the grocery, y for the health care, and z for the entertainment etc. It will help you to

  • Keep your expenses lower than your income.
  • Avoid emotional expenses.
  • Train your mind to be an excellent finance manager.

Another advantage of this exercise would be that you will not be out of money to pay utility bills. So,

4-Make sure to pay bills on time

If you do not pay bills on time, there is a late payment penalty that might seem nominal. However, if you develop a habit to pay late, this will ultimately lead to financial repercussions in a long term. Further, late payment for the bills might be reported to the credit bureaus and this leads to impairment in your credit score. Hence, to remain in the good books of the financial institution make sure all the bills are paid on time.

5-Never opt for credit card use except in some situations

It’s recommended not to use a credit card for buying products that you don’t need. Observe your pattern for using the credit card. If you use it for buying essentials then it’s ok. However, it’s not the case most of the time. So, even if you use a credit card for buying essential products, make sure payments are made on time. Otherwise, it attracts interest rates more than usual.

It’s equally important to note that if you use a credit card wisely, it can actually be beneficial for you as you build your credit score with the use of a credit card. However, make sure to pay on time. Otherwise, it will actually lead to negative consequences on your credit score.

6-Build your credit score/credit rating

There are various strategies that help enhance credit scores. These strategies include but are not limited to the following.

  1. Use a credit card that reports the timely payment to the credit bureaus.
  2. Pay all of your bills on time.
  3. Continuously monitor your credit score to see if there is/are any errors on the credit report.
  4. If there are errors in the credit reports, you’ll need to contact the bureau to remove the error.

The advantage of building a credit score is that if you have a higher credit score, financial institutions will be willing to accept your loan application at a lower interest cost. So, the key to effective financing planning is to avoid extra/emotional expenses.

7-Avoid emotional expenses

Emotional expenses are when you make expenses without thinking of potential consequences. These expenses deplete your funds and you’ve to ask for credit at the end of the month. So, the best way to avoid emotional expenses is that expenses should only be made when you have a budget for them. To achieve this state of mind, there is a need to understand finance and ensure your expenses are as planned. This can really be achieved by educating yourself on personal finance management.

8-Educate yourself to manage money effectively

There are various sources to study for personal finance. It can be learned by watching lectures on personal finance management, reading books, attending workshops, and applying the knowledge and techniques leading to an understanding of financial management techniques.

We believe if you start applying techniques for financial management, you’ll be entering a state to save your income soon. However, do not wait to accumulate savings for investment. Instead,

9-Start investing today

Yes, do not wait to reach a certain threshold for investing. Like you might be thinking, let me get x amount of savings before I start investing. This approach is not logical when it comes to personal finance management. The reason is that investing is the name of attitude and it needs to be exercised today. Believe me, if you do not invest today, you will not invest when you get a sufficient amount, it’s because investment is the name of attitude and it needs to be developed from today.

More read on, tothefinance.


In this article, we have discussed techniques to manage personal finance. This can only be done when you earn more than your expenses and invest your savings wisely. There are certain steps of personal finance management that include the following.

  1. Earn more than your expenses.
  2. Track your expenses and make sure there are no unusual expenses.
  3. Your expenses must be in line with pre-set budget.
  4. Build your credit score.
  5. Pay bills on time.
  6. Avoid emotional expenses and make sure priority is given to essential expenses.
  7. Start investing from today and do not wait to reach the threshold before starting to invest.

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