Updated On : 18 Apr 2023
Most people are not maintaining personal finance nor keep any records of their invested money which they have invested either in paper investments or in assets.
Many times it has been observed, that the people are keeping a big amount in their saving accounts thinking that in later days they will invest somewhere. It is happening very regularly with us sometimes due to shortage of time and sometimes we are ignorant.
What is stopping us?
Such small ignorance stops many regular sources of income which can be easily generated as monthly income by this lying money. If we properly monitor and give just a few minutes to update our money & investments then we get to know easily how much money is lying idly without any income generation or with less return. Few major reasons are stopping us largely to maintain personal finance by self.
- Many people are thinking that managing finance is a time-consuming process but the truth is that we do not know the mechanism to manage personal finance. If we know the mechanism then giving 10 minutes in fifteen day is enough to manage your personal finance.
- Many people are thinking that this ignorance hardly affects our life but it is not true. These small earnings from your money can slowly become big in long run due to the compounding effect. People are losing monthly income by their own lying money which may be today it looks like a small amount but in the future it can become a significant source of income when it becomes large. These earnings will be in addition to your regular earnings.
- Many people are taking the help of their charted accountant or financial advisor to manage personal finance. First, we should understand the big difference between investing your finance and managing your finance. This looks like the same but both are separate things. You can take the help of your financial consultant to invest your money so you can get more returns but to get to know your single money, investments & assets you need to manage your personal finance information only by self and this is called managing your personal finance by self.
- Many people are thinking that their earnings or savings are less so why they should maintain. This thinking is discouraging them to earn, save & invest more.
- Many people are thinking, that all information about investments is at their fingertips and this confidence most of the time becomes dangerous as they are not able to remember their investments & assets due to multiple investments. Why it is happening because during the course of time they are saving & investing regularly and their number of investment counts become large then it is very difficult to remember every single investment which they have made in paper investments or assets.
These all reasons are making us ignorant about our personal finance information and in long run, it is mainly damaging the way to multiply the money which can be done very easily and in no time.
What advantages do we get if we manage our finance by Self?
Multiple advantages are there if you manage your finance by self.
- You can understand your money better
- You get to know about your financial worth
- Protection of your money
- You will not loose your single money
- You can plan your Saving & Financial Goals
- Investment details remain confidential
- Built habit of saving & investing
- Help to get social security and freedom in life
- Finance information will help your family in a big way
- It improves your quality of life
(1) You can understand your money better – Managing your personal finance by self will help you to know your money very closely and you can understand your money in a better way. Once you know about your money deeply then you can able to find where you are getting less returns & where you are getting more and accordingly you can plan your budget & investment goals properly.
(2) You get to know about your financial worth – We are earning, saving and further investing money randomly and guessing how much money we have or every time calculates our total net worth based on our investment documents. But if we miss any document then it is very difficult to get to know how much money we have and what our actual net worth is.
But if you are managing your personal finance correctly by self then any time you are updated about your actual financial net worth.
(3) Protection of your money – Nowadays most of the investments we are doing online and after investing always we are depending upon online portals of banks, institutions or third party websites. But in case some error occurs or if they banned your account or your investment details showing wrongly then it is very difficult to remember the details of investments you have done in past. If you do not have any records or investment account numbers then you cannot claim your investment from the bank/ institution.
But if you are maintaining all the records of your investment then any time you can claim your investments. This small habit of managing your finance by self will completely protect your money & investments.
(4) You will not lose your single money – Managing your personal finance by self will help you to understand correctly from where exactly you are loosing income on your invested money. Your single money can also contribute to your income. Once you start maintaining your personal finance by self then you can better understand and can help you to extract more returns.
(5) You can plan Saving & Financial Goals – If you know your money correctly then you can plan your financial goals & investments. This will help you to get maximum returns on your investments. Financial goal setting further encourages your saving habit to create a large fund for your security.
(6) Investment details remain confidential – Most people are not sharing any details of their finance with anyone. If you use any online App or portal then your all money information gets shared. But if you are maintaining your personal finance by self then it will remain confidential with you.
(7) Built habit of saving & investing – Once you start maintaining your personal finance by self then slowly you observe that your money is growing. As you are aware of this growth of money you will gain confidence and you try to save more and invest in such schemes where you will get maximum returns on your saved money.
Slowly you will observe that your saving & investing habits are helping you to create a good corpus for your future security.
(8) Help to get Social Security & freedom in life – Life is to enjoy and live freely but due to liabilities and unsecured future we are always worried. But if we create a fund for social security then we will largely be free from all financial worries. This social security cover helps in any bad time and makes us mentally free. This will happen when you monitor your money by self and make all best effort to create Social Security and freedom in your life.
(9) Finance information will help your family in a big way – We are earning, saving & investing money for self and for our family. As we are keeping all money & investment information confidential most of the time only we are aware of it and our family is completely unaware. But if you upkeep/ maintain all your money & investment information by self then after you, your family can get to know about money which will give them future financial security and protect your family largely.
(10) It improves your quality of life – In the present world, money has created its importance. To live a quality life you need two things in life one is money and the other is time. If you have enough money & passive income sources then you can enjoy your life to the fullest.
Managing your personal finance by self will help you to enhance your money and help to create a large corpus for your future. This will help you to live a quality life.
So How to manage your personal finance by Self ?
Either of three ways you can manage your personal finance by self.
- Record in Notebook
- Maintain in Microsoft Excel
- Maintain in Pre-designed Microsoft Excel.
(1) Record in Notebook – You can record all your money and investment details in a notebook with all investment numbers, investment date maturity date and other required information.
(2) Maintain in Microsoft Excel – If you have good knowledge of Microsoft Excel then you can maintain all your money & investment information in it.
(3) Maintain in Pre-designed Microsoft Excel – If you are not good at excel and have only very basic knowledge then you can use pre-designed excel to maintain all your money & investments. Here you only need to fill the details of investment which pre-designed excel is asking you to fill. With this pre-designed excel, you can maintain details of all your investments in Banks, Post Office, Recurring deposit ( RDs), Public Provident Fund (PPF), Insurance policies, Systematic Investment Plan (SIP), Stocks, Bonds, available Cash, Bank Lockers, Retirement Corpus, Real Estate investments, Gold & other valuable metals etc.
If your want to get rid of all your financial worries then maintaining your personal finance by self is the first step towards your freedom in life.
Without losing a single minute, start maintaining your personal finance by self.