{"id":3876,"date":"2019-06-03T14:20:14","date_gmt":"2019-06-03T14:20:14","guid":{"rendered":"https:\/\/www.heirsholdings.com\/hhpeople\/?p=3876"},"modified":"2019-07-25T11:14:24","modified_gmt":"2019-07-25T11:14:24","slug":"nine-personal-finance-planning-strategies-%ef%bb%bf","status":"publish","type":"post","link":"https:\/\/www.heirsholdings.com\/hhpeople\/2019\/06\/nine-personal-finance-planning-strategies-%ef%bb%bf","title":{"rendered":"Nine Personal Finance Planning Strategies \ufeff"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"359\" src=\"https:\/\/www.heirsholdings.com\/hhpeople\/wp-content\/uploads\/2019\/06\/Money-Management-2-1024x359.jpg\" alt=\"\" class=\"wp-image-3877\" srcset=\"https:\/\/www.heirsholdings.com\/hhpeople\/wp-content\/uploads\/2019\/06\/Money-Management-2-1024x359.jpg 1024w, https:\/\/www.heirsholdings.com\/hhpeople\/wp-content\/uploads\/2019\/06\/Money-Management-2-300x105.jpg 300w, https:\/\/www.heirsholdings.com\/hhpeople\/wp-content\/uploads\/2019\/06\/Money-Management-2-768x269.jpg 768w, https:\/\/www.heirsholdings.com\/hhpeople\/wp-content\/uploads\/2019\/06\/Money-Management-2.jpg 1140w, https:\/\/www.heirsholdings.com\/hhpeople\/wp-content\/uploads\/2019\/06\/Money-Management-2-600x211.jpg 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><strong>N<\/strong><\/p>\n\n\n\n<p><strong>By <\/strong><strong>Prince Sam O. Idika<\/strong><\/p>\n\n\n\n<p>We have entered the half year mark for 2019. The question that should haunt\nus all is this: Am I meeting my Financial goals? If your response leaves you\nwith heart palpitations, don\u2019t worry. It\u2019s never too late to create financial\ngoals to give yourself and your family financial security and freedom. <\/p>\n\n\n\n<p>Here are the best practices and tips for personal finance:<\/p>\n\n\n\n<p><strong>1. Create a Budget<\/strong><\/p>\n\n\n\n<p>A budget is essential to living within your means and saving enough to meet\nyour long-term goals. The 50\/30\/20 budgeting method offers a great framework.\nIt breaks down like this:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>50% of your <a href=\"https:\/\/www.investopedia.com\/terms\/t\/take-home-pay.asp\">take-home pay<\/a> or <a href=\"https:\/\/www.investopedia.com\/terms\/n\/netincome.asp\">net income<\/a> (after taxes, that is) goes toward living essentials, such as rent,      utilities<a href=\"https:\/\/www.investopedia.com\/terms\/u\/utilities_sector.asp\">,<\/a> groceries, and transport.<\/li><li>30% is allocated to lifestyle expenses, such as dining out and shopping for clothes.<\/li><li>20% goes      towards the future: paying down debt and saving both for retirement and      for emergencies<\/li><\/ul>\n\n\n\n<p>It\u2019s never been easier to manage money, thanks to a growing number of\npersonal budgeting apps for smartphones that put day-to-day finances in the\npalm of your hand. Here are just two examples<strong>: <\/strong><a href=\"https:\/\/www.youneedabudget.com\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>YNAB<\/strong><\/a><strong>,<\/strong> aka You&nbsp;Need\na Budget, helps you track and adjust your spending so that you are in\ncontrol of every naira you spend. Meanwhile, <a href=\"https:\/\/www.mint.com\" target=\"_blank\" rel=\"noreferrer noopener\">Mint<\/a> streamlines cash flow, budgets, credit cards, bills, and\ninvestment tracking\u2014all from one place. It automatically updates and\ncategorizes your financial data as information comes in, so you always know\nwhere you stand financially. The app will even dish out custom tips and advice.<\/p>\n\n\n\n<p><strong>2. Create an Emergency Fund<\/strong><\/p>\n\n\n\n<p>It\u2019s important to \u201cpay yourself first\u201d to ensure money is set aside for\nunexpected expenses such as medical bills, a big car repair, rent if you get\nlaid off, and more.<\/p>\n\n\n\n<p>Between three and six months&#8217; worth of living expenses is the ideal safety\nnet. Financial experts generally recommend putting away 20% of each paycheck\nevery month (which of course, you\u2019ve already budgeted for!). Once you\u2019ve filled\nup your \u201crainy day\u201d fund (for emergencies or sudden unemployment), don\u2019t stop.\nContinue funneling the monthly 20% towards other financial goals such as a\nretirement fund.<\/p>\n\n\n\n<p><strong>3. Limit Debt<\/strong><\/p>\n\n\n\n<p>It sounds simple enough: To keep debt from getting out of hand, don\u2019t spend\nmore than you earn. Of course, most people do have to borrow from time to\ntime\u2014and sometimes going into debt can be advantageous, if it leads to\nacquiring an <a href=\"https:\/\/www.investopedia.com\/terms\/a\/asset.asp\">asset<\/a>. Taking out a mortgage to buy a house is one good\nexample. But <a href=\"https:\/\/www.investopedia.com\/terms\/l\/lease.asp\">leasing<\/a> can sometimes be more economical than buying outright,\nwhether you\u2019re renting a property, leasing a car, or even getting a\nsubscription to computer software.<\/p>\n\n\n\n<p><strong>4. Use Credit Cards Wisely<\/strong><\/p>\n\n\n\n<p>Credit cards can be <a href=\"https:\/\/www.investopedia.com\/articles\/pf\/07\/cut-credit-debt.asp\">major\ndebt traps<\/a>. But it&#8217;s\nunrealistic not to own any in the contemporary world, and they have uses other\nthan as a tool to buy things. Not only are they crucial to establishing your <a href=\"https:\/\/www.investopedia.com\/terms\/c\/creditrating.asp\">credit\nrating<\/a>, but they\u2019re also\na great way to track spending, which can be a big budgeting aid.<\/p>\n\n\n\n<p>Credit just needs to be managed correctly, which means the balance should\nideally be paid off every month, or at least be kept at a <a href=\"https:\/\/www.investopedia.com\/terms\/c\/credit-utilization-rate.asp\">credit\nutilisation rate<\/a> minimum (that is, keep your account balances below 30% of your total\navailable credit). Given the extraordinary rewards incentives on offer these\ndays (such as cash back), it makes sense to charge as many purchases as\npossible. Still, avoid maxing out credit cards at all costs, and always pay\nbills on time. <\/p>\n\n\n\n<p>Using a debit card is another way to ensure you will not be paying for\naccumulated small purchases over an extended period\u2014with interest.<\/p>\n\n\n\n<p><strong>5. Consider Your Family <\/strong><\/p>\n\n\n\n<p>To protect the assets in your estate and ensure that your wishes are\nfollowed when you die, be sure you make a will and\u2014depending on your\nneeds\u2014possibly set up one or more trusts. You also need to look into insurance:\nnot just on your major possessions (auto, homeowners), but also on your life.\nAnd be sure to periodically review your policy to make sure it meets your\nfamily&#8217;s needs through life&#8217;s major milestones.<\/p>\n\n\n\n<p>Other critical documents include a <a href=\"https:\/\/www.investopedia.com\/terms\/l\/livingwill.asp\">living\nwill<\/a> and <a href=\"https:\/\/www.investopedia.com\/terms\/h\/hcpa.asp\">healthcare\npower of attorney<\/a>. While not all these documents directly affect you, all of them can save\nyour next-of-kin considerable time and expense when you fall ill or become\notherwise incapacitated.<\/p>\n\n\n\n<p>And while they&#8217;re young, take the time to teach your children about the\nvalue of money and how to save, invest, and spend wisely.<\/p>\n\n\n\n<p><strong>6. Pay Off Student Loans<\/strong><\/p>\n\n\n\n<p>There are myriad loan-repayment plans and payment reduction strategies\navailable to graduates. If you\u2019re stuck with a high interest rate, paying off\nthe <a href=\"https:\/\/www.investopedia.com\/terms\/p\/principal.asp\">principal<\/a> faster can make sense. On the other hand, minimizing\nrepayments (to interest only, for instance), can free up other income to invest\nelsewhere or to put into retirement savings while you&#8217;re young and will get\nmaximum benefit from compound interest (see Tip No. 7, below). <\/p>\n\n\n\n<p><strong>7. Plan (and Save) for Retirement<\/strong><\/p>\n\n\n\n<p>Retirement may seem like a lifetime away, but it arrives much sooner than\nyou\u2019d expect. Experts suggest that most people will need about 80% of their\ncurrent salary in retirement. The younger you start, the more you benefit from\nwhat advisors like to call the magic of<a href=\"https:\/\/www.investopedia.com\/terms\/c\/compoundinterest.asp\"> compounding interest<\/a>\u2014how small amounts grow over time. Setting aside money\nnow for your retirement not only allows it to grow over the long term, but it\ncan also reduce your current income taxes if funds are placed in a <a href=\"https:\/\/www.investopedia.com\/terms\/t\/tax-advantaged.asp\">tax-advantaged plan<\/a> fund like an Individual Retirement Account (IRA). <\/p>\n\n\n\n<p>Investing is only one part of planning for retirement. Other strategies\ninclude waiting as long as possible before opting to converting a <a href=\"https:\/\/www.investopedia.com\/terms\/t\/termlife.asp\">term life insurance<\/a> policy to a permanent life one.<\/p>\n\n\n\n<p><strong>8. Maximise Tax Breaks<\/strong><\/p>\n\n\n\n<p>Due to an overly complex <a href=\"https:\/\/www.investopedia.com\/terms\/t\/tax-code.asp\">tax code<\/a>, many individuals leave hundreds or even thousands of\nnaira sitting on the table every year. By maximizing your tax savings, you&#8217;ll\nfree up money that can be invested in the reduction of past debts, your\nenjoyment of the present and your plans for the future.<\/p>\n\n\n\n<p>You need to start each year saving receipts and tracking expenditures for\nall possible <a href=\"https:\/\/www.investopedia.com\/terms\/t\/tax-deduction.asp\">tax deductions <\/a>and <a href=\"https:\/\/www.investopedia.com\/terms\/t\/taxcredit.asp\">tax credits<\/a>. After you&#8217;re organized, you&#8217;ll then want to focus on\ntaking advantage of every tax deduction and credit available, as well as\ndeciding between the two when necessary. In short, a tax deduction reduces the\namount of income you are taxed on, whereas a tax credit actually reduces the\namount of tax you owe. This means that a N1,000 tax credit will save you much\nmore than a N1,000 deduction.<\/p>\n\n\n\n<p><strong>9. Give Yourself a Break<\/strong><\/p>\n\n\n\n<p>Budgeting and planning can seem full of deprivations. Make sure you reward\nyourself now and then. Whether it&#8217;s a vacation, purchase, or an occasional\nnight on the town, you need to enjoy the fruits of your labor. Doing so gives\nyou a taste of the financial independence you&#8217;re working so hard for.<\/p>\n\n\n\n<p>Finally, don&#8217;t forget to delegate when needed. Even though you might be\ncompetent enough to do your own taxes or manage a <a href=\"https:\/\/www.investopedia.com\/terms\/p\/portfolio.asp\">portfolio<\/a> of individual stocks, it doesn&#8217;t mean you should.\nSetting up an account at a brokerage, spending a few thousand naira on a\nFinancial Planner\u2014at least once\u2014might be a good way to jump-start your planning.<\/p>\n\n\n\n<p>Three key character traits can help you avoid innumerable mistakes in\nmanaging your personal finances: discipline, a sense of timing, and emotional\ndetachment.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>N By Prince Sam O. Idika We have entered the half year mark for 2019. The question that should haunt us all is this: Am I meeting my Financial goals? If your response leaves you with heart palpitations, don\u2019t worry. It\u2019s never too late to create financial goals to give yourself and your family financial [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3877,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3876","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/posts\/3876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/comments?post=3876"}],"version-history":[{"count":2,"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/posts\/3876\/revisions"}],"predecessor-version":[{"id":3889,"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/posts\/3876\/revisions\/3889"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/media\/3877"}],"wp:attachment":[{"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/media?parent=3876"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/categories?post=3876"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.heirsholdings.com\/hhpeople\/wp-json\/wp\/v2\/tags?post=3876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}