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Tips to manage your personal finances

By Sakshi Srivastava - 11 Jun 2021 Last Updated: 11 Aug 2022
Tips to manage your personal finances

In today’s day and age, everyone desires to be financially safeguarded. It not only culminates the fulfillment of needs of you as well as your loved ones, but also ensures a peace of mind. Surely it’s not an easy task sometimes but would it not be wonderful if there was a simple trick or magic formula that allowed you to never have to worry about money or manage your finances again! While it may not be feasible, there are some simple steps you can partake to better manage your personal finances. If you stick to these helpful hints, your financial problems may disappear, and you will be able to reap the benefits of lower debt, a better credit score, and the ability to save money for the future. A sound knowledge of how to manage your personal finances is also crucial as it will help in laying down a steady foundation of your monetary stoutness. So without any delay, let’s learn

Tips to maintain your Personal Finances which need to be applied ASAP!

Below mentioned are a few tips which can come in handy if you are adamant in making your Personal Finances game strong.

Personal Finances

The above tips are elucidated below for a better understanding.

Recognize Your Present Financial Situation

You need to know how much money you have before you can start managing it better. It's pointless to believe that you can move forward without knowing where you're starting from. Starting with a complete financial plan that can inventory your cash flow, income, savings, assets, and more is suggested. Although a financial planner can help you build a formal financial plan, you don't expressly need to employ one to get started. Sitting down and recording all of your regular monthly income and spending is the most basic step toward knowing your present financial status. Save receipts for a month if necessary to figure out where money goes after significant costs like rent, utilities, and debt payments. Realizing how much money is spent on things like groceries or dining out might be a wake-up call for some people.

Make a List of Personal Priorities and Financial Objectives

It's essential to evaluate whether your present financial status corresponds with your beliefs after you've laid out your present financial condition. For example, if spending weekends with your family is important to you, hiring a housekeeping service could save you time and money. If travel is a higher priority, though, it may not make sense. It's all about having goals, thus having a clear idea of what you want to do with your money can make the process of developing a budget much easier.

When making a financial strategy, keep the following points in mind:

  • Make a budget in order to reach your financial goals, as it is the key to success. It is, in essence, a tool that allows you to take charge of your financial future.
  • Regardless of where you are in your financial plan, you should contribute equally to long-term goals such as retirement savings.

Make a Budget and Stick to it

Many people find it easy to create a budget that specifies how their income will be spent each month. However, adhering to it can be difficult.. People may lack the self-control to resist spontaneous purchases, or they may feel confined by needing to budget ahead of time. The benefit of sticking to a budget, on the other hand, is that you'll have more money to spend on the things that matter most to you. Furthermore, a budget that is prepared with your priorities and goals in mind will be easier to stick to. If you discover you don't have enough money to pay for everything you want, search for ways to cut costs.

While its common advice to cut off tiny, recurrent costs like duplicate streaming services or takeout coffee etc. it is advised that if you rent and your lease is up, go somewhere cheaper. Making substantial changes like this will have the most profound influence on your money as long as it does not substantially impair your quality of life.

The following are some helpful hints for creating a solid budget plan to achieve financial security.

  • Use a mobile app to access budgeting software and enter expenses in real time.
  • You can also prepare ahead to prevent going over budget.
  • Decide how much of your money should be spent on daily essentials, recreational costs, savings, and investments to create a budget plan.

Make an Emergency Fund

Having cash set aside for unexpected events such as a lost job, illness, or a broken car is part of how to manage money properly. Everyone must maintain an emergency fund of three to six month’s worth of costs. Including savings in your budget is the greatest method to start this fund. The amount you save will depend on how much additional cash you have, it is recommended setting aside at least 10% of your monthly income in emergency savings.

Getting out of Debt

Debt can make it difficult to achieve financial goals. This is why paying off bad debts should always be your top priority. Create a debt-reduction strategy to help you get out of debt quickly. For instance, while making minimum due payments on all of your debt accounts, pay extra money towards one debt at that particular time. After you've cleared one debt account, transfer all of your payments to the next obligation and continue from there, creating a debt-paying snowball effect. Once you are entirely debt-free, make a commitment to be debt-free until and unless an emergency arises. Leaving credit cards at home has been demonstrated to be a wise debt-reduction technique.

Also, avoid taking out a high-interest personal loan, as this will only add to your financial stress. Additionally, set aside money for an emergency so that you can easily cover unexpected expenses and avoid using your credit card. Additionally, use the following helpful ideas to fast pay off your bad debts:

  • Don't buy stuff you don't need or that will add to your debt.
  • Look for places in your budget where you may make simple cuts to free up money for debt reduction.

Regular Progress Reports Should be scheduled

Successful money management is a continuous process. It's a good idea to examine your financial condition on a frequent basis throughout the year. People should always be aware of their income, savings, expenditure, and net worth. Beyond those four figures, use check-ins to see how far you've come toward your financial goals and if any budget items need to be tweaked in the future.

Don’t be afraid to consult a Financial Expert

Once you've saved enough money and want to begin investing in order to grow your wealth, speak with a financial expert who can help you make informed investment decisions. An experienced and knowledgeable financial advisor will explain the risks associated with each investment and assist you in identifying appropriate solutions that match your financial needs while assisting you in achieving your financial objectives as quickly as feasible. In fact, a qualified financial planner may also help you create a budget, which is an added benefit. Investing is, without a doubt, a long-term approach for accumulating money. You can also get financial help from places like:

  • Personal finance and budgeting workshops are available at a local community centre for a low or no fee. Banks and credit unions occasionally offer similar workshops or courses.
  • You can also consider your parents, wife/husband, or other family members while making a financial decision if they are good with money.

Maintain a Close eye on your Credit Score

Always bear in mind that your credit score is one of the most significant factors to consider when applying for any type of financing with low interest rates. So, if you want to keep your credit score high, always pay your bills on time. You may also check your credit score for free on some reputable websites that provide this information.

Keep the Track of Your Bills and Make Timely Payments

Make sure you pay your bills on time every month, whether it's your loan monthly installments, credit card bills, or energy bill payments. You can not only use the remaining funds for day-to-day costs and savings goals, but you can also improve your credit score by demonstrating that you are a responsible borrower.

Conclusion

There are no hard and fast rules for managing your personal finances. However, there are some specific principles and limits to keep in mind as you work to improve your financial stability. Before making a decision, think about your particular needs, risk factors, and emergency circumstances. We hope this blog was helpful to in catering your needs to learn about managing your Personal Finances.

Getting Personal loan is made simple and hassle-free with Dhanguard Personal finance service in Dubai, UAE. We provide you online Personal loan service with the minimum possible trouble including paperwork & payments.

By Sakshi Srivastava

11-Jun, 2021

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Personal Loan Related FAQ

Frequently Asked Questions

  • Will the demise of the personal loan applicant affect the family?

    Personal loans that are taken from banks are automatically insured at a nominal fee and in the event of any premature demise the partner insurance company covers the entire loan amount, protecting the family from any financial risk.

  • Do I need to provide security for my loan?

    Assets are not required as security against your personal loan.

  • Is there any advance costs involved when applying for a personal loan?

    Normally, the only advance costs pertaining to a personal loan are dispensation and insurance fees.

  • What is Payment Deferment?

    According to the issuer's policy, some lenders enable the borrower to 'defer' or postpone a month's payment once every few months. To take advantage of these benefits, the borrower must make timely payments. Deferred payments do not reduce the principal amount, and hence will not lower the lowering personal loan interest rate in UAE.

  • What are Top Up loans, exactly?

    Top-up or add-on personal loans are renewable loans that can be used to supplement an existing loan after the borrower has paid a certain number of payments. Top-up personal loans in the UAE are used to reward loyal, non-delinquent borrowers by providing longer tenors or reduced interest rates, depending on the bank's policy.

  • Is it Possible for a Student to Apply for a Personal Loan in the UAE?

    No, unless the bank expressly states otherwise or the student has a guarantor, a student cannot apply for this loan. The loan's eligibility restrictions include a minimum monthly salary and a maximum age range of 21 to 65 years. Some lenders may require a salary transfer and confirmation of employment with a lender-approved organization. However, some lenders offer personal loans in the UAE without requiring a company listing. As a guarantor, you can always apply for a student/education loan.

  • Should You take out a Personal Loan to fund my Startup in the UAE?

    It would be up to you to decide. You should be informed that you must pay the loan's EMI from the beginning of the month, followed by the disbursal. You can take out a loan if you're confident that you'll be able to pay the monthly EMIs at the very least.

  • What happens if You don't pay my Personal Loan EMI?

    If you're having trouble paying your loan EMI, contact your bank to see if there's anything you can do. If you try to avoid the problem, it will only get worse. Banks will issue warnings before dispatching debt collectors. If you do not respond, they may designate you as a defaulter and may even take you to court for the unpaid personal loan in UAE. As a result, it is preferable that you call the bank and explain your circumstances. They may be able to lower your EMIs in some cases.

  • Is there any Benefit to taking out the Personal Loan's Life Insurance Plan?

    Almost all personal loans include a life insurance plan for applicants. This insurance coverage protects the borrower from having to make payments in the event of a fatal disease, permanent incapacity, or death. Some personal loans in Dubai also include life insurance plans that pay back the entire loan amount to the policyholder's family members in the event of the policyholder's death.

  • How may a Personal Loan in Dubai be used to Pay Off Credit Card Debt?

    A personal loan can be used to pay off credit card debt. By consolidating the debt, the loan might assist in the payment of the credit card bill. When compared to credit cards, it has lower interest rates. Even if the applicant has a personal loan minimum wage of AED 2,000, you can return the loan in easy monthly installments over the following few years.

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