Raghavendra P Hunasgi

What is this Personal finance?

• “Personal finance is the application of the principles of

finance to the monetary decisions of an individual or family

unit. It addresses the ways in which individuals or families

obtain, budget, save, and spend monetary resources over

time, taking into account various financial risks and future

life events.” - Wikipedia

• “Set of rules you follow to improve your financial net worth”

– Raghav

• “Systematic ways to manage your money and grow rich” –

Personal finance blogger

Raghavendra P Hunasgi

Why should I learn personal finance? • Personal finance awareness can return many financial rewards

as well as provide you with more free time to pursue your

interests and freed up money to invest.

• It can help you achieve financial freedom* and improve your

credit rating.

• It can help you attain freedom from paycheque to paycheque**

living.

• Gives you the freedom and time to pursue your dreams full-time

(like: Writing,Blogging….)

• * & ** explained in http://pothi.com/pothi/book/raghavendra-

hunasgi-dusk-dawn

Raghavendra P Hunasgi

Components of Personal Finance?

• Broadly components of PF include: a personal budget,

savings and investment planning, managing your income

and outgoings resourcefully.

Budgeting:

• Working without a budget usually leaves you mystified as

your paycheck seems to disappear; leaving you empty-

handed by the time the end of the month rolls around and

it’s time to pay the bills or put food on the table. In addition,

when you create a budget, you begin to see a clear picture

of how much money you have, what you spend it on, and

how much, if any is left over.

Raghavendra P Hunasgi

Components of Personal Finance?

Investing

To be more efficient in dealing with personal finance basics, it is

important to choose wisely when and how to invest your savings.

Put your money to work earning interest in a savings account or

returns in a retirement fund or a mutual or index fund or build

equity in your home by paying down your mortgage. Better yet,

increase your assets by investing in a few of these options, while

keeping a liquid savings account for emergencies. Failing to take

advantage of free money is a common personal finance mistake

amounting in money lost to inflation and missed opportunity. Be

cautious also of investments that promise a high return with little

or no risk.

Raghavendra P Hunasgi

Components of Personal Finance?

Debt Management

After creating a sound budget and cutting unnecessary expenses,

you may still find yourself with remaining debt to get rid of.

Mismanaging your debt through overspending, failing to budget or

high interest rates can quickly send you in a downward spiral. The

best way to handle debt is to stay out of it in the first place.

Remember to stay away from temptation to "buy now, pay later"

and only take loans for the essentials in life: education,

transportation and habitation. As a general rule, do not finance

anything for longer than its useful life. Keep your credit score high

by keeping tabs on your credit report and paying your bills on

time.

Raghavendra P Hunasgi

Components of Personal Finance

Emergency Fund

An emergency fund is a cash reserve that you keep in a safe

place and use only for emergencies. This cash reserve should be

as liquid as possible (a high-yield online savings account is just

about perfect) and should contain at least $1,000 (at first) and

eventually six to twelve months of your household’s take-home

salary (eventually). The only reason you ever tap into your

emergency fund is if a situation arises that causes your monthly

budget to not balance.

Raghavendra P Hunasgi

Components of Personal Finance

Insurance

You've definitely come a long way; there is one more important

aspect of your finances that you need to consider. You've worked

hard to build a firm financial footing for you and your family, so it

needs to be protected. Accidents and disasters can and do

happen and if you aren’t effectively insured it could leave you in

financial ruin. Everyone needs insurance to protect your life, your

ability to earn income, and to keep a roof over your head.

Medical insurance is one of the most ignored part of personal

finance in India and there is a need for awareness in Indian

audience. (If you have aging parents this should be your next

b’day or anniversary gift to them)

Raghavendra P Hunasgi

Need more information?

Raghavendra P Hunasgi

Buy online:

http://pothi.com/pothi/book/raghavendra-

hunasgi-dusk-dawn

This book is a series of activities that can

enable anyone to improve their finances by

centering the financial life on some of the

basic yet powerful principals. Instead of

supplying a bunch of budgeting sheets and

asking you to commit yourself to a program,

this book is about figuring out what you want

out of life and reorganizing your finances so

that you can have it.