Self Account Management

Portfolio guide for personal finance


What is finance 

Finance means money and money’s worth. It involves cash and cash Equivest’s (current assets) e.g. debtors, bank balance, bills receivables etc.

What Is Personal Finance 

Personal finance is monetary management where a person budget, plan save and spend his finance for future risks and future events. it is about setting and fulfilling financial goals e.g.

  1.   spending for child’s education and marriage  
  2.   After retirement financial needs  
  3.   Purchase / construction of house  

It concerns about 

  •  How one should arrange money to fulfill his needs? 
  •  How to use credit card? 
  •  How to pay money to creditors? 
  • How to control your needs according to your income?  
  • How to spend money in various areas? 

 How to create a personal financial Guide 

  1. Note down your total monthly income.
  2. Note down total spending fixed and variable in the month.
  3. Set your smart financial goal.
  4. Prepare a monthly budget.
  5. Set an emergency fund for variable spending.
  6. Start investment for the future for short term and long term.
  7. Review after a short time and adjust plans accordingly.

How to Create A Personal Finance Guide – 

  1. Prepare a budget: –

You should plan and prepare a budget for your savings and spending. It can be done by taking care of the following points- 

  • How much money you should save or spend? 
  • How much you should spend on clothing? 
  • How much you should spend on food items? 


  • You will save 35% of your income and spend 35% of your income. 
  • You will spend 10% on clothing. 
  • You will spend 20% on food items. 
  • 5% you will spend on other expenses. 
  • Spend what left after saving: –

 Don’t save money after your all expenses and spending. Firstly, deposit your fixed saving amount into the bank. Which is left after that spends on your daily expenses?

  • Go cashless: –

If you have too much money in your purse than you can spend it on useless things whether you need these things or not. instead of carrying a lot of money in the purse, you should go cashless through UPI such as google pay, Paytm, Bhim etc. As you can also enjoy cashback on online payments and save your money.

  • Don’t borrow money: –

If you want to utilize your money effectively than don’t borrow money. Avoid to taking debt, instead of taking long debt, take short debt if you need money on very urgent basis. Cut down your unnecessary expenses and save money.

  • Compare interest rates: –

If it is very urgent that you have to take a loan then before taking a loan compare the interest rates of various banks and loan providers. Try to take a loan on a minimum interest rate.

  • Stop unnecessary spending: –

This is very important for you to avoid unnecessary spending which is useless if you want to collect money for the future. you can avoid too many costly clothes, unnecessary parties, buying useless things etc.

  • Avoid credit card: –

To utilize the finance, avoid credit card. If you have a credit card, you will buy things on credit and next month you will pay interest on a credit card, so avoid credit card. The money you will pay for credit card interest can be utilized to meet any other expenses.

  • Pay your debt fast: –

If you have various debt, so pay debt fast as you pay a lot of interest on the debt and wasting your money. the debt which has a high-interest rate, pay that debt on an urgent basis. focus to pay long term debts on a priority basis. Pay long and short-term debt partly. Pay debts through cheque and draft at the last due date.

  • Create emergency fund: –

You should create an emergency fund for future uncertainties and risks. As the future is uncertain, something can happen. E.g. there may be an accident or a medical emergency. suddenly marriage of a child etc.

10.Two or more resources of income: –

You should not depend on a single source of income. You should try for two or more sources of income as your job goes or anyone business may go to the loss, then other methods of income and business will help you to survive.

11.Diversify your investment: –

Don’t put your all eggs in one basket. To avoid various risks, you should invest your money more than two resources. In an economic crisis if one investment can’t pay you good interest then you may earn well from other investment. you can invest your money into various schemes such as mutual funds, fixed deposit, recurring deposit, shares, treasury bills, commercial papers etc.

E.g.- you have invested in shares as well as a fixed deposit in bank .suddenly the company in which you invest is failed and price of shares are fall or nil .then you can easily cover your loss from fixed deposit.

12.Circulate your money: –

If you want to use your money efficiently don’t put it on rest. Circulate it more and more in economy .if you circulate your money you will not able to spend it on useless things and you may also earn some amount of interest in it.

E.g. You have Rs 3000. At your home. you may lend it to someone for a short time period or deposit it into the bank.

13.Pay debt first: –

If you have money in your hand then pay your debt on a priority basis rather than spending it on other things. try to finish your debt earlier and get rid of the unusual payment of interest on that debt.

14.Receipts in advance: –

If you are receiving money from a client or someone. then it is fruitful if you receive money in advance as you can save yourself from lending money from outside the business or pay an additional amount of interest.

15.Payments at end date through cheque and draft: –

The most effective way to utilise the finance properly that pay your creditors at the last date of payment. Don’t pay your creditors through cash, pay them by cheque or draft as it will also take time to deduct payment from your account.

E.g. The last date of payment of the debt to your friend is 9 i.e. on Friday .you gave a cheque to your friend. So Saturday and Sunday are holidays in bank .he will deposit cheque on Monday .you can use that money for more two days for your urgent needs.

16.Invest in gold: –

Currency may be banned or finished anytime. From our ancient era to today currencies are changed. Digital banking, credit or debit cards, payments apps are taking the place of currency notes. If you are collecting finance for long term try to invest in gold as with the time the value of gold is increasing and it can’t be replaced by any other thing or material.


  1. Pay debts on a priority basis
  2. Avoid credit card purchase
  3. Decentralising of receipts
  4. Centralisation of payments
  5. Receipts through cash
  6. Payments through cheque and draft
  7. Invest differently for short term and long term
  8. Maintain a good credit score
  9. Diversify the risk

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