There is really no way by which an individual can avoid BORROWING money. In today’s developing fast paced world, unexpected expenses such as medical procedures and educational cost are inevitable. This situation forces an individual to have no other recourse but to file for PERSONAL LOAN or any other loan in order to resolve the financial predicament that he is in. Loans are a part of life today but you should never be fully dependent on it when a financial calamity comes your way. The best solution to minimize CREDIT is to prepare yourself for any financial eventualities that may come your way. And how do you do this? The answer to this question is simply proper management of your personal finances.
Efficiently Managing Your Personal Finances
The first thing to do when managing your personal finances efficiently and effectively is to analyze, study and assess realistically the ratio of your income and expenses. You can do this by listing all of your gross monthly income along with your fixed and variable expenses. Make sure you are able to prioritize your expenses according to its nature. Household, medical, educational should be on the top of your list. The rest of the expenses can be treated as variable thereby allowing you to see where you can cut down without sacrificing those expenses which you have prioritized. You can now analyze the ratio between your income and expenses. If your variable expenses extremely exceed your priority expense, you can now easily pinpoint where you can cut down. Most people do not really see the many unnecessary expenses that they commit. Most of these comes from recreational and entertainment expense. You will discover that cutting down on this will leave you a sizable amount of surplus which you can use when a financial crisis comes your way. Once you’ve realized your surplus make sure that it is placed on some kind of investment that would yield good return. Putting your money on high yielding investment may put it at risk so just be satisfied with getting a reasonable amount of profit from small but more secure investment.