Best personal finance advice for beginners

Personal finance is  the most important topic  which we were not  taught  in school or have any academic knowledge. We were taught Science , Arts  even Commerce but we weren't able to learn  personal finance in institution though it is a basic knowledge which every individual need it . You can only learn about personal finance in online or by reading book.  So , Here are some  Best  personal  finance advice for  beginners.

Generally finance means the management of large amount of money of a country or a big company. Than what is personal finance ? Does it need a large amount of money to maintain personal finance??

 

The answer is no. It doesn't matter how much money do you have but  the process of managing your own   money is  called personal finance.

 Best  personal  finance advice for beginners 

In Bangladesh students remain busy in study almost a large period of time only for an academic  certification. They think from the age of  7 to 25 or 26  they will study , get good marks and they will be able to find a good job, after getting a job they will marry and  they will be able to live a happy life..this is the common mindset of Bangladeshi people. 

But the reality is too harsh. The number of students in Bangladesh is  23,907,15.The unemployment rate of Bangladesh is nearly 5.3  percent . Among this rate about 46 percent of the total unemployed youth are university graduates. Then how could you think that you will be able to find a good place in job market and there will be no worries for your finance.

 

Here you will find some  Best  personal  finance advice  for you if you  are really  interested in personal finance and want to be financially independent at an early age . Let me introduce you with the basic knowledge of  personal finance.

• Find your  category/ niche from now.

If you are a student of early 20,  this the best time for you to learn personal finance.From now choose a sector in which you want to be master. If you love to sing, drawing or playing or dancing , be the master of it. So that you can earn by it. Choose your professional category from now. Find out in which you are good at.

• Set a goal :

Bing financially independent is not an easy task. You need to have a strong desire behind it. Find out a reason , why you will work . Find out your what are your needs and wants. Then , make a list of your goal. Set a limit, when you want to achieve these goals. Make a daily routine that will help you to achieve some daily goal. Make sure this daily goal leads  you to weekly goal and these weekly goal leads you to the monthly goal. So that, you can achieve all your goals after years .

• Start Thinking how can you compound your money. 

If you are 20 or 21 than your family may not mind if you don't do anything for earning money. But if you are 25 to 30 it's high time to earn money. Find your passion, become the master of it and make the highest use of it. It's the perfect time for your active income. Make money by your knowledge and labour and play games with them.  Find out different ways to earn money. Work hard to earn money .  Don't  forget to save and invest money. 

• Know the the core level of Personal finance.

   1. Savings : A amount of your earnings which you keep  for future after managing your expenses and investment is called savings .

   2. Investment : The money you keep for buying a share or stock or bond is called Investment . It is an asset by which you can grow a  small portion of  money of your income to  a large amount of money.

    3. Expenses : After saving and investing  the             money you  have to fullfil your needs is called  expenses. There are two types of expenses. These are:-

     1. Assets and

     2. Liability.

Asset is something which can earn money for you. For example - If you buy  a stock or share , or if you keep this money in a mutual fund . Day by day this money will produce more money for you. These are one of the best source of passive income.

 Liabilities are that type of riches  which can't produce money by it's own . Rather , you need to pay a huge amount of money for this this. This type of riches include Car, House, Gadgets etc. Because you need to pay for  the maintenance of the house , car and those gadgets.

My  Best  personal  finance advice for beginners is -

If you earn 100 tk . Keep 90 tk for saving and investing , keep 10 tk for expenses. From 90 tk,  keep 80 tk for investment and save 10 tk. Now calculate it as per your income and divide them into three sources.

• Start earning money : 

It really doesn't matter who you are, how old are you or what is your educational qualification , there is always a way to earn money. No matter how small your capital is , you can start even with zero capital if you are willing to earn money.But keep it mind carefully, opportunity won't come to you , you need to find them. Be open minded . Learn from everyone. Observe more everything around you. Ask, why it's happening ? How can you deal with it?

Nowadays it became easier to earn money because of online. There are lots of opportunities in online platform . Find out what suits you most  and start learning everything about it and start earning money.

• Increase your passive income sources.

There are two types of income. They are : -

    * Active income

    * Passive income.

Active income means a work in which you need to give your time and knowledge and energy and earn money from it. 

On the other hand passive income is something like, you don't need to do anything but your earning is coming while you are resting at home. Nowadays by the grace of internet there are lots of passive income sources have created. These are - YouTube video , blog , any content in online platform can increase money by it's own. Besides that there are lots of options to increase your passive income.  Some of them are:

    • Investment 

    • Saving

    • Share

    • Government bond

    • SIP

    • Bank bond

     • Fixed deposit

• Start saving Money :

Now that you know the core level of personal finance and also know how to earn money ? Now it's time to save them. No matter how little you earn , you should always save some money for future. Most of the youth , even some adult person don't know importance of savings. Because we weren't taught it in our school.

Again, many people can say that he/ she saves money in their saving account. Let me tell you saving account in not good enough for your personal finance.

Saving accounts are a safe place to keep your money . Even the Bank will give you some profit also but it's not increasing your money . Let me explain, imagine you have bought a packet of Chips by 10 tk . After 5 or 10 years the cost of Chips become 12 tk . Now you have to buy the chips with 12 tk because of inflation. But if you keep 10 tk with 2 percent profit in your savings account , after 5 or 10 years you will get the same amount of money with the same profit which you assigned 10 years before. Bank won't give you the extra money for the inflation, though the value of the money has increased but your profits doesn't increase.

Then what can I do to save my money with to get a large profit? Here is the answer, save a small amount of your money. Buy more assets, invest money  in mutual fund, buy stock, bond. Don't  work for money, let your money works for you.

To be Financially independent you need to follow  Best  personal  finance advice for beginners and  implement it in your life. I hope you will  have a successful life .   If you are ager to know more about personal finance let me know in the comment section. I'll write more informative post for you.