Managing your Personal Finance can be very simple

Easy ways of Managing your Personal Finance.

First, you need to separate your income from your expenditure.

Income would include salary and any regular inflows from investments while expenditure covers all monthly expenses. Expenses can be categorized into –

• Rent • Utilities (electricity, telephone, cable, internet etc.) • Insurance -home, car, health • Groceries • Loan Repayment • Transportation • Miscellaneous

Some of these expenses are fixed while the others are variable. Fixed expenses include rent, loans, insurance, etc. as they remain the same every month. Variable expenses are those that fluctuate each month – like the amount spent on groceries.

In order to account your fixed expenses better, it might be a good idea to pay for them using cheques, or through ECS (Electronic Clearing System), etc. When you use cash to pay for variable expenses, you get a strong idea of how much you have spent which can result in less buying and avoid unnecessary spending.

Indiscriminate use of bank or credit cards can result in people not knowing where all the money has gone. Getting a good handle on where the money goes is the key to making a budget work. While balancing your accounts, make sure you put away some money as savings and keep some for entertainment!

Don’t be disheartened if at the beginning your debit and credit columns don’t balance out. Most often you would realize that you are spending way more than you need to. Take heart and work at lowering your variable expenses or increasing your income.

A general guideline in the financial world is that household expenses should not total more than 35% of income. People should be able to set aside 10% for savings, and 5% for charity or donations. One rule of thumb is to have three to six months worth of fixed expenses set aside in case of emergency or unexpected circumstances.

A balanced budget allows for planning for more variable expenses, such as vacations, gifts or large furniture purchases. Several resources give additional information about retirement planning and planning for purchasing a home. Do a thorough study before making these important decisions.

Perfios (www.perfios.com) helps you to manage personal finance in a safe and trusted environment and help users analyze and understand their personal finance in a simple, easy and secure way.

It helps you target your financial goals and control your spending.

About The Author Kunnath Santhosh is a Founder and Director of Perfios(http://www.perfios.com). He has over 14 years of experience in the IT industry and has worked with Companies such as Aztecsoft and Valicert/Tumbleweed. He was one of the earliest members of Aztecsoft and had worked with teams building various state-of-the-art products for Aztecsoft customers such as Microsoft, Pervasive, Asera etc. His experience with Valicert/Tumbleweed reinforced the product building discipline that he acquired at Aztecsoft.