Optimize personal savings

As long as you are getting paid for your hours, you will never have 100% flexibility & freedom. To create real time freedom, you need to generate cash flow by making your money work for you. This is the precise reason that you need to save money and plan to optimize savings.

This led me to below mentioned poll to identify best possible ways to optimize money.

https://www.dhirubhai.net/posts/pprasannan_personalfinance-financialplanning-financialliteracy-activity-6821279395739643904-pG0_

Below mentioned is the result and subsequent analysis of the poll on which my article is based upon.

At times it happens that people are so terrified of their finances that they are too scared to look. They know deep down that they are spending too much, and that they are going deeper into debt every month. Yet, somehow, they ignore their finances. They don’t even open their bank statements or their credit card bills.

The goal is to have a balanced and diversified portfolio/capital. This calls for putting a portion of your savings into investment for growth. If you are into some financial crisis you can rely on your capital investments.?

Some of the essential skills you will need to master to optimizing your savings are as mentioned below:-?

1. Expense tracking and reduction through budgeting.
2. Debt eradication and avoidance.
3. Banking.
4. Investment.

Covering top 2 reasons basis poll results in this article.

Expense tracking and reduction through budgeting: - Earning and saving don’t mean to stop your spending portions. It is not about to cut short your basic means and start piling up money for your future.

Below mentioned framework will be useful:-

Few expenses cut down tips:-

• Lower your Cable TV/Internet bill.
• Shop around for car insurance.
• Save money on your mobile phone.
• Save on your electricity bill.
• Canceling unused subscriptions.
• Use a discount app for grocery shopping.
• Save with use of public transportation.
• Buy in bulk to lower grocery bill.
• Less frequent in going out for lunch/dinner.??
• Determine Necessary vs. Unnecessary Expenses.
• Negotiate your bills.

Debt eradication and avoidance: - Any debt, whether it’s your car loan, home loan, student loan or credit card bills, living with it isn’t easy at all. The cost isn’t just limited to repayment, but also mental and emotional stress. And when you think about the life that you have been dreaming about, all you wish for is to be debt-free as soon as possible.

Below mentioned framework will be useful:-

The advancement in technology and ease in availability has led to a surge in loan applications. While loans are a medium of purchasing something expensive that you don’t have enough funds for, opting for too many loans can result in a debt trap. In such scenarios, proper planning is required to come out, and choosing from the most appropriate debt repayment methods is a must.

What is the Debt Avalanche Method?

The debt avalanche method is all about paying off debt with the highest interest first. You are also required to make minimum payments on your other debts.

After eliminating the first debt, you only have to proceed to the one with the next highest interest rates. You continue kicking out the debts in that order until there’s none to weigh you down.

How the Debt Avalanche Method Works

The following are easy steps to pay off loans and credit cards using the debt avalanche:

Step 1: List your debts: - The first step is to list your debts in order of their interest rates. Start with whichever has the highest interest rate and end with the lowest-interest one.

Include their balances and minimum monthly payments. Getting organized this way ensures you leave out none of them.

Step 2: Make minimum payments: - It’s good to pay the monthly minimums on your debts. That’s how you avoid fees, penalties, and ruining your credit score.

Step 3: Pay extra money on the highest interest rate: - All your extra money should go toward the debt with the highest interest rate. Deciding on how much of your income to dedicate to debt payment goes a long way.

Step 4: Proceed to the next-highest rate: - Once you get rid of the highest-interest debt, its minimum payment goes away. This means that you’ll have more extra cash in the following month.

So, put the money you were paying on that first debt toward the next debt in your list. This means that the second debt receives its minimum payment plus the amount from the first debt.

Step 5: Repeat the process: - Keep doing it over and you could be debt-free soon.