Mastering the fundamentals of effective money management is a crucial skill for everyone. However, navigating personal finances can prove to be a daunting task for many, especially those who have just begun earning. Often, lack of budgeting skills among the beginners leads to financial mistakes with long-term repercussions. Therefore, learning how to manage your funds responsibly at an early stage becomes a requisite for a financially stable future.

So, to help you manage your personal finances efficiently, below are some of the best finance tips.

1. Build a Credit Profile

Once you start earning and have a stable income source, you must first focus on building a credit profile and retain a high credit score. A credit score indicates your creditworthiness based on how you manage your loans and credit cards. A high credit score not only lets you avail loans or credit cards easily in future but also at lower interest rates and favourable terms. In case you are a beginner or someone without any credit history, you might face difficulties in pursuing lenders to give you a loan at the time of need.

You can begin building your credit profile by first getting an entry-level credit card, a secured credit card or a short-term loan as per your needs and eligibility. If you maintain your credit account responsibly and make timely repayments, you can build a high credit score. You can visit online marketplaces like to compare and apply for loans or credit cards that are best suited for you and to track your credit score.

2. Start Saving Early for Emergencies

When you first start earning on your own, it is easy to succumb to splurging and making impulse buys. Such unnecessary purchases can ultimately drain the available funds, forcing you to live paycheck to paycheck without any savings for unforeseen circumstances. So, it is important to start budgeting and setting aside a portion of your salary every month as savings for your future. Irrespective of the amount you save, the key to future financial stability is being consistent from the early stages of earning your money. It is generally advised to save at least 30 – 40% of your salary every month. You can also invest this amount as per your preferences like mutual funds and SIPs or fixed deposits. This money that you save can later act as your emergency fund and as a cushion in case of sudden job loss.

3. Get Insured

Although you may have saved a considerable amount of money, it is advised to consider insurance coverage. Even if you are in good health and have no dependents, accidents or medical emergencies can occur despite taking precautions. Therefore, investing in insurance is always a wise step, as it allows you to avoid using up your savings in case of any unfortunate event. Additionally, purchasing insurance at an earlier stage enables you to pay lower premiums, which in turn helps you save more.

4. Understand and Plan Your Taxes

Tax planning is a crucial factor for every earning individual, regardless of your salary or tax slab. By knowing all the tax exemptions that you can avail and the applicable liabilities, you can save on taxes and plan your finances better. To reduce your tax liability, you can consider investing in options like tax-saving fixed deposits, mutual funds, PPF, and NPS. However, before investing, you should know about their restrictions or other terms of use like, foreclosure charges, lock-in periods, etc., so that you choose the best-suited course of action. Effective tax planning not only helps you save more but also prevent last-minute hassles that may arise towards the end of the fiscal year.

5. Don’t Overspend & Avoid Borrowing Funds

Becoming financially independent is just the beginning. It is equally important to manage your finances wisely to maintain stability. Create a budget you can follow in the long run, and ensure that you spend within your means to avoid debt and lead a financially stable life. In addition to avoiding unnecessary expenses, be careful about how much credit you borrow. Many banks and lenders offer pre-approved loans and credit cards that may seem attractive at first glance, but accepting such offers can add to the total debt you need to pay off later. Failure to repay such debt can result in high-interest charges and leave you struggling with your repayments. So, it’s important to borrow only within your repayment capacity and avoid overspending.

Personal finance and money management are all about forming clear future goals and balancing your spending and savings accordingly. This balance can include practical budgeting, consistent efforts towards living within your means, understanding how taxes work, making suitable investments, and building a good credit profile. Though there are many ways that are suggested to manage your money, it is imperative to find the one that is tailored to your individual needs and goals.


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