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  Benefit From  Kaytek's Personal Finance Management Tips |
Consulting
Investments
Tips on Raising Incomes and Cutting Expenses
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Benefit From Kaytek's Personal Finance Management Tips |
 For one of our individual customers, Kaytek suggested some Personal Finance tips on Raising Incomes and Controlling Expenses.
For Raising Incomes, possibly the following
ideas could be useful. Try to classify future incomes
either individually or jointly for all the members of the household on the following
lines : Financial Instrument Incomes (Only Fund-Based) Shares - Dividends Income Shares - Capital Appreciation Hundi (Bills of Exchange) - Interest Income Other Financial and Savings Instruments - Interest Income Professional / Business Incomes ( Primarily Personal
Expertise and Experience Based, may or may not need
funds ) Business Salaries Professional Salaries Business Profits For each of the above sources of income, work out a possible risk / return analysis based on three possible scenarios |
Pessimistic Realistic and Optimistic. Again the same can be done either individually or for the combined household incomes for all the family members.
For Cutting Expenses, possibly the following
ideas could be useful. Expense Budgeting is a very useful technique to organise personal finances. Since Incomes are always more difficult to raise, suggestions for expense budgeting are as follows : Classification Of Expenses - Classify all average expenses of say last 3 months
into different types - e.g. Electricity Food / Grocery Clothes Cable Television Telephone - Fixed Line Telephone - Mobile Transportation Books, Magazines, Periodicals Leisure - Movies, Plays You could do the same either individually or combined for the entire household. Then against the major items that have made up the above expenses, classify these expenses as Essential and Non-Essential. It may be a good idea to try and reduce / eliminate the Non-Essential expenses over the next 3 months, till the Income side gets stabilised properly. |
Zero Based Budgeting - ZBB techniques can also be used to look at all expenses afresh (i.e. with a zero budget) and then work upwards to arive at fresh cost estimates. ZBB is a very popular cost cutting technique. Again, joint discussions and planning amongst the different family members is the key for effective personal finance management. There are widely available Microsoft Excel / Google Spreadsheet templates & Web Based Open Source Tools for Expense Budgeting and other Personal Finance Management techniques. |
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