As your life changes through new careers and family obligations, your personal finances change as well. And not always for the better. If you are having a personal finance crisis, look to some of the tips below to help you during these trying times. Following through with them can help you take control of your money once again.The information in this article covers what you need to know to keep your personal finances in order.
Keeping Your Personal Finances In Order
Set a monthly budget and stick to it. This is one of the simplest and most important tips that you must do. If you don’t have an idea of how much you really are spending versus your actual amount of income, you have no idea of how big the problem really is. Nor will you have a good sense of where you are wasting capital. A budget can help you do both. Start by mapping out what you think is your income and spend without checking the numbers. Then keep specific track for an entire month writing down every expense and every dollar in. At the end of the month, you’ll have a solid idea of your real expenses and where you personally were over- or underestimating your personal spending habits. Begin to make adjustments immediately.
If you are using credit cards, pay off the ones with the highest interest rates first. The interest from credit cards can drown you each month in expenses that you never see any value from. If you are carrying $10,000 or more in debt, this could be hundreds of dollars you are just handing over to the credit cards companies. The bleeding is worst with high interest rate cards, so to save you money the quickest, get rid of the debt on those cards first. Focus on one at a time. Put any additional funds you can spare into that one card until paid off, then move to the next.
Savings Account/Emergency Fund – Personal Finances
Create an emergency savings account. Even if you feel your luck has turned (for better or worse), there is never a guarantee of your fortune staying status quo. It can get bad fast, or it can turn from bad to catastrophic in the matter of days. You need a nest egg of capital that you only use when things are at their worst. This can save you from charging your existence onto a credit card or, even worse, from filing for foreclosure or bankruptcy. Make it a rule to take 5 to 10 percent of all income and place it into this emergency fund.
Take a look at your insurance costs. An area where people are often overpaying or overbuying is in insurance. Look at your health, auto and home insurance policies and compare them to where you are currently. If you are a healthy twenty-something, the chances of you needing an uber-expensive insurance plan is slim. Lowering it a tier can save you over a hundred dollars each month. The same is true for your auto. If it’s a beater and you are paying crazy premiums, then lower your coverage or shop around. Again, hundreds of dollars can be saved annually.
These tips can help you get your personal finances back on track. Give them a try ASAP. They are easy to begin, so nothing is stopping you.
