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Everything You Need To Know About Personal Finance

Updated on 24 Feb 2020

Personal finance is a broad term which covers topics about money management, saving, and investing. But if you’re new to this, it can seem a bit overwhelming. That’s where we come to the rescue! Here is a breakdown of the important things to remember when planning your personal finances.

1. What is ‘personal finance?’
2. Why is personal finance essential?
3. What are the things to keep in mind while creating a personal finance plan?
4. What are the benefits of personal finance planning?
5. What is the process you should follow while planning your personal finances?/a>
6. Are there any good tips for personal finance planning?

What is ‘personal finance?’

Personal finance is a broad term. It includes managing your personal finances effectively and efficiently. This management is an entire process encompassing budgeting, banking, mortgages, insurance, investments, estate planning, tax planning and even retirement planning. Sometimes, it is referred to as the industry that not only provides financial services to companies and individuals, but also to those who advise individuals and households about investment and financial opportunities.

It is about meeting the personal financial goals set by you for you and your family. They can be short term plans, retirement plans or saving for future education of your children. Personal finances depend on your expenses, income, living requirements, and your own goals and desires. Coming up with a financial plan to fulfil all of these within your financial status can be difficult. That is why, it is important to be financially literate and make the most of your savings and income.

It is important to be disciplined while planning your personal finance, have a sense of timing and be emotionally detached as it is business and business should never be personal. However, it is important to take risks sometimes as well. It is not easy managing finances, especially personal finances. You have to take savvy decisions, which are only possible if you know about all your investments, be it stocks, mutual funds or bonds. You also have to be aware of your financial history, loans, liabilities and use credit cards responsibly and wisely.

Why is personal finance essential?

As an individual, having a personal finance plan should be your first priority and the sooner you start, the better. It is important for the security and freedom of you and your family. A person’s present and future are the two most important aspects of his or her life for which he or she earns money for. If you start handling your personal finances today, you will have a better future, guaranteed. It not only keeps you at ease in the present, it allows you to enjoy the future to the fullest.

What are the things to keep in mind while creating a personal finance plan?

Every financial activity that you carry out on a personal level falls under the category of personal finance. To make sure that you have a successful plan, you need to consider your income, plan out your short and long term budgeting needs and goals and create a plan that matches all these goals to get you to your desired financial security. While dealing with your personal finance you need to take into account the following products –

  • Insurance policies
  • Credit cards
  • Mortgages and loans
  • Banking
  • Savings account
  • Investment products like bonds, equity stocks, mutual funds and so on

Making an investment plan is not easy. That is why you need an expert in your corner who will guide you throughout the process. At Kristal AI, we have a team of financial advisors who expertise in all kinds of finance management including personal finances.

What are the benefits of personal finance planning?

Your family’s future financial security is not the only reason why personal finance is essential for everyone. Here is a list of benefits of personal finance planning –

  • You evaluate your financial condition
  • Get profit from investing in a ton of investment products
  • Keeps your focus on the financial goals set by you
  • You get organized regarding spending and saving your money
  • You are always aware about what is happening with your money
  • You have more control over your finance
  • Better financial planning will always leave you with extra money

What is the process you should follow while planning finances?

It is important to have a proper plan to manage your personal finances. You need to establish a step by step guide to maximise your savings and profits. Here is a process you can implement over time. Keep in mind that you can make changes according to your requirements and financial position.

  1. Establish your financial goals
  2. Gather data about all your investments
  3. Analyze and data and create a financial plan
  4. Identify and evaluate alternative course of actions
  5. Revise your plan
  6. You can get in touch with our financial experts to create a personal finance plan according to your income, savings, debts and investments for a better future.

Are there any good tips for better planning?

It is not easy to establish a personal finance plan and. Here are some tips that will help you create and follow a plan with discipline and restraint.

  • It is always better to start as early as possible
  • Make an efficient budget
  • Create and maintain a 5 year plan
  • Always have an emergency fund
  • Save regularly
  • Simplify your life
  • Keep a check on your credit score
    1. 720 = good credit score
    2. 650 = average credit score
    3. 600 or less = poor credit score

Hope you found this article useful! For any help you can always drop in a mail to support@kristal.ai. Happy Investing!


The materials and data contained herein are for information only and shall in no event be construed as an offer to purchase or sell or the solicitation of an offer to purchase or sell any securities in any jurisdiction. Kristal Advisors does not make any representation, undertaking, warranty or guarantee as to the update, completeness, correctness, reliability or accuracy of the materials and data herein. All opinions, forecasts or estimation expressed herein are subject to change without prior notice. Kristal Advisors and its affiliates accept no liability or responsibility whatsoever for any direct or consequential loss and/or damages arising out of or in relation to any use of opinions, forecasts, materials and data contained herein or otherwise arising in connection therewith.

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