| Top Personal Finance Tips |
| By Credit Federal |
Published
08/2/2007
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Financial Tips
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Personal Financial Improvement Tips
Learn the top personal finance tips and be prepared to modify your attitude and behavior.
Get personal finances under control and pay bills timely. Use our free personal budget software to track expenses so you can stop wasteful spending, and use our free bill reminder calendar so you send in your payments on time.
Free desktop software to balance checkbook entries, or use the software as a computer checkbook register.
We're all human... mistakes occur, accidents happen, and life throws us all a twist from time to time. The ability to identify problems, to adapt and to modify behavior can affect how well; and how quickly, we overcome personal financial problems.
Top Personal Finance Tips:
Set a financial goal and outline steps for accomplishment. Unless you win a lottery or have some other uncommon stroke of luck, it's not likely you'll receive instant wealth. Like most of us, you'll probably have to work hard to achieve your financial goals. And not just work hard, but also be hard on yourself. Discipline as well as motivation is important when setting financial goals and a plan of action. This brings us to tip number two...
Modify your spending and saving behavior as your financial situation changes. If; for example, you get a raise and start making more money, increase your savings percentage. If you pay off a debt, add some; or all, of that budgeted expense to your savings. Don't simply continue setting aside the same amount of money out of habit.
Pay off your credit card bills in full each month. Although paying off credit cards in full each month may impact your credit score, not paying them off in full may affect your financial soundness which; in turn, can affect your credit score. Having rollover balances on your credit cards is like trying to fill a cup with a hole in it. In order to keep water in the cup, you have to keep pouring more water than the cup holds. Consider that water to be interest, which increases your overall balance debt and makes the hole in the cup bigger.
If you can't payoff credit card balances in full each month, at least pay more than the minimum due.
Here's an example of how costly making a minimum payment can be: Let's say you have a $3,000.00 balance on a credit card that charges 18% interest. If you pay back only $75.00 per month, it will take you five years and two months to fully repay, at a grand total cost of $4,615.87. That's $1,615.87 more than the original charge(s). If; however, you double the amount you repay per month to $150.00, then you will payoff the balance in two years at a grand total cost of $3,593.48. That's less than half the time, and at only about one-third of the interest. Hence, simply by doubling your repayment amount, you more than double your savings (see below).
Repaying a $3,000.00 credit card balance at 18% interest:
Total Cost Total Interest
Repaying $75.00 per month $4,615.87 $1,615.87
Repaying $150.00 per month $3,593.48 $593.48
Save money. How often have you personally seen someone receive a sudden windfall of cash, only to blow it quickly and completely. Bonus money isn't any good if it's not used wisely. And by building up a savings account, you'll have emergency cash for hard times, and you won't be backed into a corner of having to use high interest credit cards.
Set long term financial goals and save for them, not just for short term. Saving money for a car loan down payment is a short term goal. But what about long term financial goals, such as retirement? Set wheels in motion now so old age doesn't surprise you. By starting early, you won't have to put aside as much each month.
Leverage employee benefits. Start an automatic savings program through your 401K. See if your employer matches your contributions for even greater savings.
Get adequate life insurance. You may be dead and not have any more financial worries, but what about your family? Can they continue without you and without the work you do, or the money you bring home?
Don't overly invest. Don't invest so much of your extra cash that you jeopardize your financial standing. Just like with gambling, invest only what you can afford to lose. Also diversify your investments.
Don't let your emotions control your financial decisions. Spending is a euphoric high for many people. It's quite tempting when feeling depressed to give ourselves a special treat. Instead, give yourself a small reward for good savings.
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