4.9 (Rating) – Wouldn’t it be super awesome if there was some magic way or a simple trick that allowed you to never have to worry about making money, budgeting, investing, saving etc. again? Well, even though these expectations are not 100% realistic, there are quite a few simple things that you can do right this moment that will improve your current money situation. Learn more with this Complete Guide On How To Manage Your Personal Finances. Look at the 7 Topics below to help you successfully manage your personal finances.
Budgeting (How To Budget Like a Pro)
Budgeting simply involves creating a spending plan that defines your expenses and prevents the temptation of spending recklessly. A budget can also refer to your detailed financial plan for a specific period of your life. Creating a budget is the best way to prioritize your needs and spend on what is important to you. You need a budget to help you appropriately plan your income, so you don’t incur debts.
Why should you Budget?
- Budgeting is one of the most effective ways of meeting your financial goals.
- Budgeting boosts your savings for the future and limits your spending.
- Creating a budget and sticking to it helps you plan for the unforeseen, but important expenses.
- Budgeting prevents the piling up debts.
How to Create a Budget
Creating a personal budget isn’t so difficult because it simply involves you taking a record of your expenses in view of your income. You can create a weekly, monthly, or yearly budget depending on what works for you and how regular your income is.
- Record all your income – this should include the amount of money you have currently and the amount you expect regularly.
- Make a list of your expenses (both fixed expenses like rent and variable expenses like food).
- Make a list of the debt you owe, if any.
- Calculate the total of both income and expenses, if your expenses end up being more, than you’d have to adjust your budget list where necessary.
- Review your budget regularly – chances are that your income might increase or reduce, as well as your expenses.
What are the Best Tools for Budgeting?
Some of the best and effective tools that can be used in creating a personal budget are:
- You Need A Budget (YNAB)
- Personal Capital etc.
Credit Cards (How To Select The Best Credit Card) – Complete Guide On How To Manage Your Personal Finances
Credit Cards are cards that enable you to purchase items on credit. They provide a form of electronic payment with specified credit limits. Credit limits in turn restrict the amount of debt that you can incur on your line of credit. A credit card provides you with an opportunity to purchase items and carry out other necessary monetary transactions without having any physical cash in hand.
How to Pick the Best Credit Card for You?
There are certain credit cards that are best for you because they fit your spending habits and goals. These are some important tips to help:
- Check your credit score and work towards improving it if it’s low.
- Define what kind of benefits you would want to enjoy from your credit card and apply for a card that can provide those benefits.
- Understand your spending limits because you might need to opt for a card with low-interest rates if you would carry over a credit balance.
- Check the interest rates of the card you wish to apply for. Does it suit you? If no, you might need to change it.
- Apply for the card that offers you the absolute best incentives and value that you would actually make use of.
Which Credit Cards are the Best Currently?
It is hard to choose ‘a’ single best credit card because the credit card that could be best for you is still subject to your spending habits and choices. However, there are some credit cards out there that stand out in a huge way. The below list of Credit Cards will help you get a hold of your personal finances now. Complete guide on how to manage your personal finances contd.
- Capital One QuickSilver Cash Rewards Card
- Citi Double Cash Card
- Chase Sapphire Preferred Card
- Discover It Student Cash Back
- United TravelBank Card
- Bank of America Premium Rewards Credit Card
Getting Out Of Debt – Best Ways To Get Out Of Debt
Why is Debt Bad?
A tiny bit of debt won’t hurt, right? This is exactly how it all starts. You begin innocently by making a small purchase on your shiny new credit card and then all of a sudden, you end up with thousands of dollars behind in bills and in large debt. The idea of owning a little intensifies, and then there is the temptation to owe more than you can afford. There are a lot of reasons why debt is bad for you:
- Debt is costly. It is easy to get sucked into the belief that you are not parting away with anything as you just make your monthly payment. However, that couldn’t be further from the truth. The fact of the matter is that the interest rate on your credit card will keep piling on unpaid interest.
- Debt prevents you from saving for the future and attaining your financial goals.
- Trying to figure out “how to pay debts”, could cause mental stress and lead to complicated health issues.
How do you get out of Debt?
It really is stressful to owe, but your only safe place is getting out of debt. Here are some tips for you on getting out of debt.
- Calculate how much debt you really have; this helps you to be deliberate and prepares your mind on what you are really up against.
- Double up on your payments by paying more than the monthly minimum on your credit cards.
- Cut down on your expenses and reduce excessive spending
- Pick up a side gig, a part-time job that would result in more income for you to pay down the debt quicker.
- Opt-in for cards with lower interest rates, so you don’t have to spend so much settling interest rates
What are the Best Methods of Getting out of Debt?
- The Debt snowball method: This involves listing all your debts and paying off the smallest one first before moving to the larger ones.
- The Debt Avalanche Method: As opposed to the snowball method, this involves paying off debt with the highest interest rates (larger debts) before attending to the least debts.
Personal Loans – How To Get A Loan, How To Choose The Best Loan
What are Personal Loans?
A personal loan is a sum of money borrowed by an individual to sort out certain personal financial issues such as debts, rents, medical expenses, etc. This amount of money is usually borrowed from banks, credit institutions, or online lenders and is usually paid back after a certain period of time (usually after 1 – 7 years, depending on the nature of the loan). Just like any other kind of loan, personal loans have an interest rate. Some personal loans do not require collateral, these are called unsecured personal loans.
How do you get a Personal Loan? Complete Guide On How To Manage Your Personal Finances
Personal loans could help you cater to large expenses that your income might not be enough to handle. These are some ways to secure a personal loan:
- Decide on the kind of personal loan you wish to get – unsecured, secured, medical, etc. This is all dependent on the amount of money you’re seeking to get.
- Decide on whom to get the loan from (the lender e.g., banks, credit unions, online lenders, etc.). All of this can also depend on the urgency of the situation or circumstance that you need the money for.
- Check your credit score. The higher the credit score, the better the loan terms will be.
- Check the requirement of the lender for the kind of personal loan you wish to get.
- Prepare all of the necessary documents that are needed for the loan.
Which Personal Loans are the Best?
Although a lot of factors play a big role in getting a good personal loan, having good credit scores and good income are probably some of the most important ones that allow you to get the best interest rate and the best overall terms for your loan. Here are some lender institutions with attractive personal loan options:
- Best Egg
Retirement – How To Plan For Retirement The Right Way
Why is Planning for Retirement Important?
If you are truly serious about working on a strategy to help you get a hold of your personal finances now, then you will want to carefully read through this Complete Guide On How To Manage Your Personal Finances’s section. Retirement is your resting period, but you could end up in financial trouble if adequate planning is not done regarding your finances and other related matters. There are several reasons you should plan for your retirement, and here are some of them:
- To cater for future unforeseen expenses and circumstances, you might never have envisioned.
- To live your dreams and afford the life you’ve always wanted during this period of your life.
- To help support certain members of your family as there might be no enough income to go around.
- Social security and other pension plans might not be as reliable as you think.
- Planning prevents you from over-dependence on other people.
What is the Best Way to Save for Retirement?
One of the best and most popular tips that are recommended for anyone that is currently seeking advice on when to start saving for their retirement, would be to ‘start today’. There is a popular aphorism out there that goes something like this – ‘Little drops make an ocean”. A little saving here, a little saving there; can provide for your whole retirement.
- Set financial retirement goals and constantly review them in order to measure your progress
- Take a step further – open a retirement savings account with a brokerage firm and start small by allocating a certain amount of money to be kept in the account regularly.
- Investing is also a good way to save some money for your retirement
What Are the Best Retirement Plans out There?
Here are some amazing retirement plans that can help you pay less tax yet help you save better:
- IRA (Individual Retirement Account)
- 401(k), 403(b) offered by your employer
- Roth IRA
- Health Savings Account (HSA)
- Cash Balance Pension Plan
Saving Money (Absolute Best Ways To Save Money) – Complete Guide On How To Manage Your Personal Finances
Why is it Important to Save Money?
Life is quite unpredictable and has so many twists and turns; some of these twists place heavy financial burdens on you, which could result in you incurring debt and/or being overly stressed.
Saving money helps you to be financially secure and prepares you for ‘rainy days.’ This makes you mostly in control of your life and prevents you from being greatly affected by certain circumstances because you’re financially in charge.
Saving money also helps you afford certain luxuries which otherwise you might not have been able to afford. Saving can help you live your dreams and afford the life that you’ve always wanted.
What are the Best Methods for Saving Money?
It is essential for you to incorporate the habit of saving into your lifestyle because it saves you from more problems than you can ever imagine. These are some of the best ways to make saving a large part of your life:
- Set financial saving goals because they help you to save deliberately.
- Constantly allocate a certain amount of money out of your income irrespective of how little or meager it seems.
- Save extras – apart from the set amount from your income, other extra money from gifts, etc. should be saved too.
- Make use of saving tools and participate in saving challenges in order to be motivated to save better.
- Avoid reckless spending and impulse buying.
- Plan and budget your finances adequately.
Which Tools Are Best for Saving Money?
Here are some tools that can help in your Saving Money Journey:
Understanding Credit Reporting – Complete Guide On How To Manage Your Personal Finances
What is Credit Reporting? And Why is it Important?
Credit reports are prepared by Credit bureaus, and they are summaries of your credit history – this would include your creditworthiness, loan and payment history, records of bankruptcy, etc. A credit report is simply a detailed report of your financial background, especially your credit history. Your credit report also contains a list of your past financial as well as records of past financial institutions that you had transactions with. One of the things that we really focus on in this Complete Guide On How To Manage Your Personal Finances” is that it is absolutely crucial to include Credit Reporting in your strategy in order to come out successfully on top.
A credit report is important and is required when trying to make most large purchases since it provides reliable information about your creditworthiness and reliability. Credit reports are also important because they shine a light on which individual is financially stable.
What Exactly is a Credit Score, and How is it Determined? Complete Guide On How To Manage Your Personal Finances
Your credit score is a three-digit number that is calculated based on your credit report and can be used to determine your creditworthiness. It is a score that helps your lender know how likely you are to pay off your debts. It usually ranges from 300 – 850 (the higher your score, the higher your level of credit eligibility or worthiness).
It is determined by examining a certain percentage of your payment history, the amount owed, length of credit history, new credit and type of credit used.
Best Ways to Improve your Credit Report and Score
Excellent credit reports produce high credit scores, which in turn boosts your credit eligibility and helps reduce high interest rates. These are some tips to help improve your credit report and score:
- Pay your bills on time and regularly
- Avoid carrying over balances in your credit cards
- Constantly review your credit reports
- Do not apply for credit often. Emergency situations excluded
If you are serious about your money and want to learn more about personal finances, then please make sure to look through all of the above topics on this Complete Guide On How To Manage Your Personal Finances.
Also, take a look at this cool little site called Money.com for more tips on personal finance stuff.