Are you keen to know the benefits of a financial advisor? The truth is- each of us has the ability to manage our own finances by ourselves. It is just about having the right amount of knowledge and information at the right time. Making financial decisions is all about Mathematics. The three main things you need to know to manage your finances are knowledge, application of maths and managing the funds.
Learn the Fundamentals:
Just like most of the topics, there are tons of financial information available for all those who are looking into the technicalities of financial management. Though its takes a bit of your time to understand the concept and to apply the same. It is worth the efforts as it is not ideal to always depend on an outsider for all your financial assistance. There are some areas that require focus in order to be smart at this topic and internet will help you get all necessary information on the same:
- General principles of financial planning
- Estate planning
Though it looks like a lot of topics, it is important to have information on these to get long term from your financial planning. Firstly, it is crucial to know that no one out there has all information. Always there is something to learn for everyone.
Having said that, don’t rely completely on internet. Check and validate the source of information before accepting and implanting the figures and formulas. There are two types of information in internet; one is based on facts, figures, statistics, podcasts and financial blogs while the other one is totally based on personal experiences, training program and education. You need to have a balance of both types of information in order to gain knowledge and to check the acceptance ratio of the strategies.
Application of Knowledge:
Of course, learning is a very crucial factor however, until it is applied into your budget consideration there will be absolutely no benefits from all the information you have gained. It’s good to start with the basics to have a foundation and before creating a budget get track of the cash flow. Track all the inflow of cash and outflow of cash on a periodic basis. This will help you to know what your money is doing and where it is being used for benefits and where it is getting wasted. Have a small petty cash book or an excel sheet to track these from time to time. Mostly for the first four months you might have to track each and every expense, post this, you will able to automatically control all unwanted expenses and plan your finance such a way that there is enough amount for expenses, for savings, for investments and for emergency purposes.
Try gaining knowledge on the below topics in order to cover all aspects of your finance:
- Budgeting & Cash flow
- Life Insurances
- Managing your debt levels
- Estate planning
This is considered as the most challenging part of financial management. When you have money, it is easy to manage but the actual issue arises when the income is lesser than expenses. This is when you need to tackle your emotions once and needs on the other side. However, with enough knowledge and proper application of available funds, you will be able to prioritize and manage the money wisely to survive through the tough times.
In simple managing your own money is more like managing your own behavior. Taking consistent and small actions over the time will gradually increase your confidence in handling money and will eliminate the need for a financial advisor for any personal financing planning. Learn to see the big picture in planning and work in terms of having an objective.
Benefits of avoiding Financial Advisor:
- Will help you making rational decision making with finances.
- Helps in controlling hopes, fears, dreams and other emotions.
- Cost and time saving.
- Managing your money will be easier and fast.
- Helps in educating yourself, practicing smart and rational behavior, applying your knowledge on money management.
- Reliability on outsiders will reduce.
With the help of these tips you will be able to avoid a financial advisor to make any big decisions in your life. Always start it in a slow manner, learn and gain information and knowledge, apply and analyze the results. The ultimate goal should be to utilize the income to gain maximum returns at low risk.
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