“Money can’t buy happiness” - if this is true, the flipside of this saying is equally true- “lack of money can bring great unhappiness”. You would understand how lack of money can create problems in life, if you have ever been stuck in a debt trap. If you do not want to experience the shackles of debt again in 2018, here are 6 useful tips for you.

It can often be scary when it comes to facing your finances. But the only way to progress is to get an honest analysis of your current financial position. In other words, take into account all your current debts, loans, investments, income and expenditure. The ideal way to analyze your finance would be by scheduling it properly. Set aside a few hours just to review all your income and expenses in a month as well as your debt and loan totals.

In case you want to see a growth in your wealth, start looking for places where you can cut back some expenses or earn more so that the cost of the upcoming holiday season doesn’t drain you financially. After you are done with your personal finance analysis, it’s now time to go backwards and find out how much you can spend during this holiday season. Try to make estimates of what each will cost.

This will help you get an idea of how you can build a holiday season that perfectly suits your budget. In case you want to extend your budget beyond the holiday season, there are several smart phone Apps that you can take help of. The best personal finance apps include Mint, Wally, Personal Capital etc. For starting, you can also use a budgeting template as well.

If you don’t like using smart phone apps, go for a spreadsheet. Now that you have completed the most difficult task, i.e. looking at your finances, next is to decide where you want to stand financially in the years to come and also making a plan to reach that position. Make your financial goals for the long, medium, and short term and write them all down. Your goals may be as big as buying a house or as modest as a long-awaited holiday with your loved ones. But writing them down will help you manage your personal finance accordingly.

Your goals will help you track your progress and you will start enjoying the process of saving, investing and budgeting in the long run. It is estimated that at least 58% of credit card users pay less than their full monthly balance. If you are one of them, you may end up building up a huge debt trap for yourself in the long run.

Moreover, as the balance carry over, you will have to pay interests as well. Credit cards should be used for your convenience only. Don’t make it a habit of using credit cards every time you go for shopping. Only buy things that you can afford in cash and repay the full balance every month.

An essential part of staying debt-free is to have a fund that you can touch only in case of emergencies. Emergencies may arrive any time in life and in such cases, having enough cash in hand will prevent you from using credit cards. Most people do not have that kind of a financial cushion. Hence, they end up borrowing money or keeping their properties mortgaged or selling possessions in order to pay for the emergencies. Now, the important question is how much would be enough for an emergency fund,

Ideally, having three to six months’ worth of expenses in hand is the best way to stay prepared for any unforeseen event. However, don’t let this amounts care you off. You can start by saving whatever amount you can because it is always better to have anything than nothing. Every little bit you save will help you stay cushioned against the unexpected.

When it comes to personal finance planning in India, only saving won’t be enough. So, once you have already built the habit of saving money for future, it’s time to make it grow as well. If you are new in the field of investment, fret not! There are plenty of personal finance planning pdf and e-books available on the internet.