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Lack of awareness about money management leads people to ask, "Why is personal finance important?" The reasons are many in detail here. This question is at the core of how to live a safe and satisfying life. Personal financial skills are important because without them, people often spend their entire lives for money, always in debt, unable to hold on and get ahead. This is bad enough, but the problem is much deeper. When children see their parents strangling for money, they are often seen to do the same as adults. Why is personal finance important? Because without it, generations of people are very likely to go as slaves of money to live unsatisfactory lives.
Why is personal finance important? This is a general question that runs through people's minds, especially recent graduates who have not experienced the consequences of financial illiteracy before. To answer the question, "Why is personal finance important?", Many educators and policymakers can cite reports produced by financial education foundations as well as academic studies. These documents suggest that personal finance training leads to greater understanding of financial products, a more effective budget, and more money sent to retirement accounts to build a financially secure future. Sadly, the latest personal finance test data shows that there is a lack of basic financial skills required in the real world.
Guide on how to manage your finances:
Get what you deserve and spend less than you earn
This may sound simple, but many people struggle with this first rule. Make sure you know how much your work is worth by evaluating both inside and outside the company for your skills, productivity, job functions, contribution to the company and the current rate that you do. Getting an inadequate salary, even very little amount per year, can have a significant cumulative effect in your working life.
No matter how much or how little you are paid, you will never get ahead if you spend more than you earn. It is often easier to spend less than to earn more, and in many areas a small cost reduction effort can lead to savings. And it does not always require a big sacrifice.
Stick to the budget
An important step to consider when trying to move forward financially is budget. After all, how can you know where your money is going if you don't have a budget? If you don't know where your money is going, how can you set spending and savings goals? You need to set a budget, whether you earn a lot or a little in a year.
Pay off credit card debt
Credit card debt is the number one hurdle in moving forward financially. They are very convenient to use small plastic pieces and it is so easy to forget that this is the real money that we are buying when we pay to buy them, big or small. Despite our good resolve to pay the balance quickly, the reality is that we often do not pay too much for the things we used cash for. Contribute to a retirement plan
If your employer offers an actual retirement plan (or other type of employer-sponsored retirement savings program), you should consider contributing it if you can afford it. Often with EPF schemes, your employer will contribute the same amount that you deposit to your account up to a certain percentage. This is often referred to as "employer matching". If your employer does not offer a retirement plan, consider the PF.
Keep savings plan
You've heard it before: Pay yourself first. If you wait until you have met all your other financial obligations, chances are that you will never have a healthy savings account or investment before you see what you have left. Before you start paying your bills, decide to set aside a minimum of 5% of your salary to save. Better yet, the money automatically deducted from your paycheck has been deposited into a separate account.
For investment
If you are contributing to a retirement plan and savings account and can still manage to put some money into other investments, then it is better.
Maximize your employment benefits
Employment benefits such as an EPF plan, flexible expense accounts, medical and dental insurance, etc. are a lot of money. Be sure to maximize yourself and take advantage of those who can save you from lowering taxes or out-of-pocket costs.
Check your insurance coverage
People who pay a lot for life and disability insurance are talked about, whether it is adding these covers to auto loans, buying whole life insurance policies when term life makes more sense, or life. Buy insurance when you have no dependents. On the other hand, it is important that you have adequate insurance to protect your dependents and your income in the event of death or disability.
Keep good records
If you are not careful to keep complete records, then you are probably not claiming all of your allowable income tax credits and deductions. Now set up a system and use it throughout the year. This is much easier than struggling to find everything at tax time, only to lose items that could have saved you money.

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