The 4 Tips That You Must Know In Your Personal Financing Journey
Are you someone who is heavily indebted? Is your personal financing strategy not working? Do you have a plan to get out of debt? Do you feel like creating a financially secure life is a monumental task? Sometimes we all need that reminder in order to get going. Even though we know or have someone to tell us – it feels and resonates differently at times when we read it or hear it from a totally independent source.
Being secured financially doesn’t have to be herculean. In fact, its quite doable. Again – once we manage our mindset and focus, we can get it done. Others have done it – so can you.
90% of adults state that having their finances in order makes them happier. Are you ready to join the ranks of the 90%? Here are some must know tips for your personal financing:
1) CREATE A BUDGET
When was the last time you made a budget for all your income and expenses?
Do you often find yourself broke, and don’t know why? By creating a budget, you take into account of everything related to making and spending money. One great framework to model your budget to is the 50/30/20, 50% goes to your necessities, like rent and food, 30% goes to discretionary expenses, which can easily be lumped with “wants”, and 20% towards your savings and investments.
Please be minded that this is YOUR budget…
2) MAKE AN EMERGENCY FUND
When you get to an accident, would you have enough money to cover your emergency expenses? 60% of people would say no, according to a survey by bankrate.com. It’s prudent to have at least 3-6 months worth of living expenses saved at a minimum. One of the best ways to ensure this is to automatically save a certain percentage to your savings account designated as an emergency fund.
3) SAVING FOR RETIREMENT
If you think retirement is a long ways off, then it’ll come quicker than you think. The best time to plant a tree was 20 years ago, and the second best time is now. When you hit 50, you need to have six times your salary in your retirement account.
By your 60s, you need to have 10 times your salary saved up. If you haven’t started as yet – just get going. As with anything, start small, and with baby steps and as you progess you can increase.
4) IF YOU HAVE CREDIT CARD DEBT, PAY IT OFF ASAP
One of the best investments you can make to pay off high interest rate debt. The average interest rate with an unpaid balance is around 17%. If you have multiple credit cards that need to be paid off, it would help a lot to use the “avalanche” method. By using this method, you will have to pay off the credit cards that charges the highest interest rate. Afterwards, you’d move on to the next highest interest rate card after the balance is paid off.
By sticking to these 4 tips for a financially secured future, you’ll mitigate the likelihood of getting yourself in deep financial troubles, and can even use these to turn around your fortunes.