There is no escaping the world of personal finance, it touches upon every aspect of your life. No matter what age, or where you are at in life, it most certainly affects you in some way. From children that receive a weekly allowance, to adults that receive a standard paycheck, learning the necessary skills to manage your money is vital to achieving success, happiness, and a stress free life. Allow me to provide some very simple tips on financial management.
You should always have either a debit card, or at least $25 dollars in cash for minor purchases. First, it helps if you are a Costco member like myself, since they only take American Express! Also, new laws allow merchants to set minimum purchase amounts for use of credit cards, and I’ve found myself buying things I don’t need just because I only had my credit card available to me. I
Work to keep your credit rating as high as possible. Having a high credit rating will allow you to have lower interest rates than those with lower scores. Obtaining a mortgage, renting a home, utilities, car lease or purchase, and other such services can be severely impacted by a bad credit score. It’s amazing how simple and yet important this fundamental task is, and yet it’s the very first breakdown in financial management for so many people.
Math is fun! Don’t believe me, huh? One of the life’s greatest wonders is the power of compound interest, and the earlier you learn this lesson, the better. From savings account, to an investment brokerage, IRA’s, and 401K, compound interest could be the best friend you ever have.
The best financial decision one can make is to try to avoid debt altogether. This should just go without saying, and yet so many people defy such simple logic. I know the usual argument, “there is no such thing as good debt”…and I kind of agree with that. But, quite frankly, there is a such thing as OK debt! Stay away from credit cards, and payday loans. However, a mortgage isn’t necessarily a bad thing!
Don’t spend any money on get rich quick schemes. People thought my blogging activities were another get rich quick scheme when I first started. Here we are over a year later, and I’m not rich, but rather making a steady online income. Also, it didn’t happen all that quickly. Just make sure you stay away from snake oil medicine men. Be cautious of those pyramid schemes, and false promises, after all this is your hard earned money.
Don’t throw out old junk before taking a closer look to make sure it really is junk. It can be a huge boon to your budget if you find out that your old table or chair is worth a few hundred or thousand dollars. It took me a long time to heed this advice, and thanks to Ebay, Amazon, and Craiglist, it has greatly paid off. From selling old college textbooks, to used television sets, I have made quite a few bucks off of what was previously thought of as junk.
These tips can help anyone understand and improve their personal financial situation into something healthier, and more productive. No matter whether you’re starting out with $5 or $500,000, the same principles apply, and you can use tips like these to better yourself and your finances immediately!