The world of financial planning can seem tedious, boring and frustrating. Most people enjoy spending money on fun things, not saving it for retirement in forty years. Yet those same people get upset when the electricity gets shut off and they have no reliable car to get to work.
Managing personal finances is a very important skill to learn and use. If done properly, finances become much less of a source of stress. There are many ways to go about achieving personal financial success.
Budget
One of the most important things you can do is create a budget and stick to it. Teach yourself to live within your means. It is easy to say, but sometimes hard to do. It takes self discipline to adhere to a budget every month.
The biggest mistake people make regarding their finances is not budgeting. When you know what you have coming in and going out, you have financial control. When you spend as you please and have no real concept of what is in the bank, your money is controlling you.
Bargain shop
The ability to purchase the most expensive goods and services on the market may seem impressive. You may think you are showing people you are doing well. What it really shows is that you have no concept of wise shopping or managing your money.
There is no good reason to pay more for an item at a designer shop. A name does not make an item any better. You can get that same item for half price at a discount store. Bargain shopping allows you to get the items you want and still have money left in your pocket.
Savings account
Open a savings account and put a set amount into it every payday. . This ensures you will have money for any emergency that may pop up. Life happens: accidents, illness, children’s needs, repairs and many other things can come up out of nowhere.
Another nice thing about a savings account is that it can become your nest egg. Moreover, the U.S. Department of Labor suggests making saving for retirement a priority. If you do not have to withdraw from it very often, then the amount will add up. This money can come in handy for vacations or even retirement.
Wise investments
This includes things like vehicles and appliances. Invest in things that will pay for themselves, so to speak. For example: don’t buy a car that looks good, but needs constant repairs. Another example is the type of stocks you invest in. Do your research before buying stock in any company.
When you purchase anything, you are making an investment in that item. Purchase things that will last awhile. Opt for trustworthy and dependable over shiny items that just hit the marketplace.
Get health insurance
Whether you purchase it through your workplace or a private company, get health insurance. Injuries and illnesses can cause not only physical and mental discomfort, but also stress for you and your loved ones. Having health insurance can alleviate some of that stress.
Health insurance may not cover all the medical bills, but it will cover a percentage. There are generally deductibles that you will have to pay out your own pocket before the insurance will kick in. This is far better than being stuck with the entire bill!
Get an education
This is very important. With the proper education, employment opportunities will broaden. Doors will open in places you may not have ever thought to look. While you are getting your higher education, you can continue gaining real world experience by holding down a job in your field of interest.
Many choices are available for furthering your education. You can go to a trade school to learn a particular skill set and then begin your career in that field. You can go to college and earn a degree. You can also go to a trade school run by a specific company. For example, a truck driving school makes additional employment opportunities possible.
Establish and keep good credit
This does not only refer to credit cards. Paying rent, car payments, utilities and phone bills are all examples of credit. Keeping your bills paid and current is an excellent way of establishing and keeping good credit.
Having good credit benefits you in many ways; obtaining a loan at a lower rate is on example. Another benefit is not having to pay high deposits on utilities if you have to move. Good credit helps if you are changing cell phone companies or even trying to get certain jobs.
Be thrifty
Recycle and/or reuse what you can. The point is, don’t be wasteful. By purchasing things that are one use only, you are throwing your money away. You use the item, throw it away and then have to go buy more of that item.
Another way to be thrifty is by learning to spot good deals. For example when preparing to make a rather large purchase like a television, shop around and compare prices. Don’t settle for the first TV you fall in love with.
Take care of what you have
Have your vehicle serviced regularly, don’t misuse appliances and electronics. Take care of your furniture. This way you don’t have to come up with the money to replace these things quite as often.
One of the biggest mistakes some people make is not valuing what they already have. They covet new and shiny items. This attitude results in mistreating what they already own outright. By having to replace items more often, it becomes a vicious cycle that is hard to break.
Buy cheap and replace often. In the long run, you are wasting money in this cycle. Buy decent quality (decent, not highly expensive) from the beginning and then take care of the items.
Protect what you have
Purchase home owner’s/renter’s insurance. This will protect you in the event of a robbery, fire or natural disaster. You may lose irreplaceable items, and that is extremely disappointing. However, you will have the means to start again if necessary and that is better than nothing.
Have a security system installed. This may not only save your property from being stolen, it can possibly help save your life. Contrary to popular belief, not all security systems are expensive.
Following these tips can help you manage your finances successfully. It can take time to get your financial situation in order. However, you will learn valuable tricks along the way.
Everyone develops their own way of managing their finances. In time, you will figure out what works best for you. One thing most people seem to agree on is that budgeting is necessary and so is learning to be frugal.