Personal finance tips anyone can follow
Getting on top of your personal finances is the secret to a more secure, less stressful lifestyle.
However, this can be a bit of a challenge to achieve without the right guidance, so here are a few vital pieces of advice for helping you to manage your money better.
Budgeting is important
Having a carefully orchestrated budget is the best way to keep your personal finances in check, and with the help of a Google sheets budget template – like this free offering from Keepify – it has never been easier to do this digitally.
At its most basic level, a budget will let you look at your incomings and outgoings and ultimately aim to make sure that the former exceeds the latter so that you can save cash rather than overstretching yourself.
Building a budget will even let you see where your money is going so that you can readjust your priorities if necessary so that you can live within your means.
Set achievable goals
If you are feeling overburdened by debt and you cannot see a way out, it is sensible to break things down into more manageable chunks. Rather than saying ‘I will pay off all of my debts by the end of the year’, instead focus on things you can achieve in the short term to make daunting tasks far more manageable.
The fastest way to do this is to divide your total debt so that it forms monthly repayments that you can fit within your available budget. These short term goals you set will lead to long term benefits for your finances.
Do not ignore interest rates
The higher the rate of interest on a debt, the more it will cost to manage, so it is far more sensible to try to pay down any loans you have that are charged at a high interest rate as a priority.
Other obligations may seem smaller and easier to conquer, but focusing your efforts on the debts that are costing you the most money is the way to go.
It is also relevant to consider interest rates from a savings perspective. If your savings account does not have a particularly competitive rate of interest, you could do much better by shifting your cash elsewhere.
Plan for emergencies
It is safe to assume that at some point in the future, you may incur unexpected expenses that will require you to cough up quite a bit of cash in a short timeframe. Whether it is costly car maintenance, a home appliance failure or some other disaster, being caught out by one of life’s little trials is all too common.
This is why you should plan to have some savings available to cover emergency expenses that come out of the blue.
Some savings plans will prevent you from taking cash out of your account until certain conditions have been met, so having a separate account for emergency savings will put you in the most favorable position to cope in worst case scenarios.
Photo by Morning Brew
