Part two of the video continues to discuss ways to manage your personal finances. It is important to keep track of expenses whether you employed or unemployed says Mr Subramanya S V. Furthermore, it is essential to reduce expenses to fit your budget. Breaking down your income to suit your personal needs enables responsible spending. In addition, it encourages investing for long term goals and saving for rainy days. While saving is important, a lot of people are only saving for the long term and disregarding the emergency fund.
Financial education is vital if you are striving for financial independence. Whether you are earning an income or not it is beneficial manage your personal finances properly. Lack of proper financial management causes a lot of problems later in life.
The earlier you keep track of your financial matters the better, says Subu. It doesn’t matter when you start making money in life, poor financial management affects the future badly. He advises allocating certain percentages to all the household expenditure. This will depend on individuals and household income. For example allocate 50% to monthly expenses, 30% to savings and investment and 20% to indulgence.
He also highlighted the importance of an emergency fund. A lot of people are either not saving at all or only focus on the long term goal. Having some money saved in a non-fixed deposit setting where it can easily be accessed is important. Reckless spending and lack of good record of expenses lead to overspending. Therefore, to manage your personal finances, learn financial planning.
The PS Show engages with Subramanya SV, to discuss how to plan and track your expenses.