Finance is a term that is related to the study of and flow of money, in the form of investments and other financial assets. Knowing finance is of utmost importance in every aspect of life. Financial knowledge will help an individual to plan their future safely and securely. Managing one’s finance need a lot of attention and care. If finance is not taken care initially a person will have to face financial crises in his/her future.
Finance/Money is needed to carry our day to day activity smoothly. Be it education, family expenses, planning for higher professional courses for children, planning for future retirement, planning for health-related expenses as the person grows older. Saving and securing money or finance is a must for every individual.
An individual should manage his/her finance systematically and wisely. As the cost of inflation is increasing daily. Every individual should start planning to manage and double their income as soon as possible. The first and foremost requirement for managing finance is, we should start recording and start tracking our day to day expenses in a systematic manner. A person should maintain an excel sheet for the inflow and outflow of income every month. And should try to avoid unnecessary expenses, which will result in a shortage of money in the long run.
An individual should be in a position to double their savings every year. As the cost of inflation increases, a person should be in a position to increase their earning too. Otherwise, he or she will never be in a position to save money to meet the unforeseen crisis. These unforeseen crises will lead to a great loss of finance from their savings. The most important requirement is to secure one’s life with adequate life insurance policies. Which will take care of these unforeseen events and will help them to save a lot of money.
There is a lot of difference between safe saving and secured saving. Safe saving is a process of saving our hard-earned money in a bank, fixed deposit, mutual fund, post office, and other investment banks. On the other hand, Secured Saving is a process of saving our money in those investment sectors that will assure to help you in case of an unforeseen crisis. The best way is going for an insurance cover.
People tend to take their life for granted and never think about these unforeseen crises. And spent a lot of money by just buying things that are of no value and are of no use to them in the future. But in reality, they are ignorant about how to, when to and where to spend their finance. This lack of knowledge leads to a lot of financial mistakes which leads them to lose their money as they grow older. And most of the time they are unaware of their future risk associated with loose of job and medical expenses in case of any illness.
There are many types of financial insecurities in life, which should be faced and handled wisely. Among all, an individual should understand and secure his or her life in a safe and secure manner. By investing their money in secured savings along with safe savings. Secured savings like insurance will play a major role in helping an individual with extra money to meet their current financial requirements. But at the same time, the safe saving will help an individual will liquid cash if needed. But the best way is to diversify one’s saving smartly.
Never invest all of your income in one basket, diversify it into various sectors of investment assets. First and foremost is ensuring your life in a reliable insurance company, which will help in getting the claim settled as early as possible. Secondly in shares, mutual funds will yield a higher return in the long run. And last but not least, try to generate Passive Income along with Active Income.
Active Income will help an individual with financial support as long as he or she is working actively. But most of the time people are not thinking about any unforeseen situation. If they are not in a position to work anymore because of any health crisis or loss of job due to market conditions. Then in that case what will happen to their financial balance sheet?
Passive income is a form of income which will help any individual to create a pipeline of income in the long run. Those who know the importance of finance/money will always create different ways of generating finance into their life.
Finance plays a crucial role in every individual’s life. Finance is needed for education, marriage, medication, and retirement. To lead a dignified life, we need financial freedom along with financial security. Give importance on how to manage your finance in your day to day life. Financial knowledge will help to face financial crisis and help in meeting future needs without compromising present needs.
“The sooner we learn to save money, the better will we be in solving problems many”.