Tips on how to improve your personal finance by Rich Dad Poor Dad If you are not good at managing personal finance however much you may earn you will be left with no bank balance by the time you retire. Don’t let this happen, put in efforts and plan properly setting realistic goals that are not impossible to attain, and stick to your plan and soon you will see your personal finances accumulate. This also leads to proper usage of your resources and will give you immense satisfaction in the end. How to assess that the plans you are making are realistic? First look at the available income from all sources. Calculate the taxes that are mandatory. Prepare a realistic budget of the household expenses you have to incur every month. From the total income minus the taxes and the monthly household expenses, not what you have left behind is the surplus from Rich Dad Poor Dad which you can plan on your savings. This is an important resource from which you can plan on making important and big purchases. If you draw up a balance sheet you will be able to arrive at the net worth. Tips on how you can increase your net worth Resist from taking bank loans that look so affordable in the beginning but slowly they drain all your surplus funds with the huge interest charged and the installments soon feel very heavy and then you regret taking them. Fewer liabilities will increase your net worth and this in turn improves your credit rating too. So settle your liabilities as soon as possible. Make wise investments by buying assets that are profitable and escalate in value; having valuable assets will improve your net worth. A lot of study and forethought should be there while dealing with the portfolio of personal investments. High yielding investments surely have greater risks and if you do not have sufficient risk appetite just leave them, go for the safe investments though they yield less. Better be safe than sorry, right? Properties that are known to possess values that are volatile and change ever so often are riskier; these are mainly stocks and precious metals like gold. To trade in stocks and earn well on a regular basis one has to be pretty vigilant to the market trends and smart enough to capitalize when the going is good. These are the investors who love to take risks and if they make their moves carefully can indeed make huge profits, but this is not guaranteed. Tested ideas for having better personal finance Be informed while making financial decisions Prepare a budget and stick to it
Stay clear of impulsive buying Adopt cost cutting measures Some effective cost cutting strategies Avoid unnecessary expenditure Lessen the number of times you eat out Buy in wholesale or bulk to get the stuff cheaper Using coupons whenever possible Opt for a car pool for reaching the office To put it in a nut shell, personal finance is a perfect mix of net worth, cash flow, planning, budgeting, cost cutting, saving, and wise investing.