Finance

10 Steps to Prepare Your Personal Finances For a Recession

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Personal Finances For Recession

Recessions are a natural part of the economic cycle. They can be caused by a variety of factors, such as a financial crisis, geopolitical challenges, shifts in consumer behavior, or when excessive regulations and overspending come into play which is the case now and during the stagnation years of 2010, 11, 12, and so on.

While you may not be able to control the overall economy, you can take steps to prepare your personal finances for a recession. Here is a comprehensive plan to help you weather the storm and come out financially stable during tough times.

Build an Emergency Fund

One of the first and most important steps to prepare for a recession is to establish or beef up your emergency fund. Financial experts recommend saving at least three to six months’ worth of living expenses in a readily accessible account. This fund acts as a financial cushion during a recession, covering essential expenses like rent or mortgage payments, utilities, groceries, and insurance premiums. Having this safety net can alleviate the stress that comes with unexpected job loss or reduced income.

Reduce Your Debt

During a recession, job security becomes uncertain, making it essential to reduce your debt burden. Make it a priority to pay off high-interest debts like credit card balances, personal loans, or payday loans. By eliminating or minimizing these liabilities, you free up more of your income for essential expenses and saving. Consider refinancing options to lower interest rates and consolidate debt, making repayment more manageable.

Create a Budget

A well-structured budget is a powerful tool for managing your finances during a recession. Start by tracking your monthly income and expenses to get a clear picture of your financial situation. Categorize expenses into necessities (e.g., housing, food, and healthcare) and discretionary spending (e.g., dining out and entertainment). Cut back on non-essential expenses and allocate your resources wisely to ensure you can cover essential costs even if your income decreases.

Diversify Your Income

Relying solely on one source of income can be risky during a recession, as job loss or pay cuts become more likely. Explore opportunities to diversify your income by starting a side hustle, freelancing, or investing in income-generating assets like rental properties or dividend stocks. Multiple income streams can provide a safety net and help maintain financial stability even in challenging economic times.

Review and Adjust Your Investments

Your investment portfolio should align with your long-term financial goals and risk tolerance. During a recession, stock markets can be volatile, and asset values may decline. Review your investments regularly and consider rebalancing your portfolio to reduce risk. Seek professional advice if necessary to ensure your investments are well-diversified and aligned with your financial objectives.

Evaluate Insurance Coverage

Insurance plays a vital role in financial preparedness for a recession. Review your health, life, disability, and auto insurance policies to ensure they provide adequate coverage for your needs. It’s essential to understand your policy deductibles, coverage limits, and premiums. Consider increasing coverage if necessary to protect your family and assets during tough times, which is the situation now with inflation and high gas costs.

Trim Non-Essential Expenses

Identify areas in your life where you can cut back on non-essential expenses. This might involve canceling unused subscriptions, reducing dining out, or finding more cost-effective ways to entertain yourself and your family. Small adjustments can add up and provide you with extra funds to bolster your emergency fund or pay down debt.

Preserve Retirement Savings

While it may be tempting to reduce contributions to your retirement accounts during a recession, it is important to continue saving for the long term. Historical data shows that markets tend to recover over time, and reducing your retirement contributions could have a detrimental impact on your future financial security. If possible, maintain or even increase your retirement contributions, taking advantage of potential market discounts during downturns.

Seek Professional Guidance

During a recession, financial decisions become even more critical. Consider consulting a financial advisor who can help you deal with these challenging times. They can assist you in making informed investment choices, optimizing your financial plan, and adjusting your goals based on economic conditions. Professional guidance can provide peace of mind and increase your financial preparedness.

Maintain a Positive Mindset

Lastly, maintaining a positive mindset is essential when preparing for a recession. Financial challenges can be emotionally taxing, but staying focused, adaptable, and resilient is the key to overcoming them. Surround yourself with a supportive network, and remind yourself that recessions are temporary. By staying proactive and optimistic, you’ll be better equipped to handle financial setbacks and come out stronger on the other side. Right now, we just have to tough out these high food prices and hopefully things get better in 17-19 months.

Finance

12 Financial Steps To Take If You Have Lost Your Job

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Financial Steps

Losing your job can be a challenging and unsettling experience, bringing about financial uncertainties that need to be addressed promptly and thoughtfully. While the situation may feel overwhelming, taking the right financial steps can help you navigate this challenging time with greater ease and stability. Here is a comprehensive guide on the financial steps to take if you have lost your job.

1. Assess Your Financial Situation

Before making any decisions, take a thorough look at your current financial standing. Calculate your savings, outstanding debts, monthly expenses, and any other financial obligations. This assessment will give you a clear understanding of how long your resources can sustain you.

2. Review and Trim Your Budget

Create a budget that reflects your new financial reality. Cut back on discretionary spending, like dining out and entertainment, and focus on essential expenses such as housing, utilities, groceries, and healthcare. This step will help stretch your savings further and minimize unnecessary expenditures which can hurt certainly during times of high inflation.

3. File for Unemployment Benefits

If eligible, apply for unemployment benefits promptly. These benefits can provide you with temporary financial relief while you search for a new job. Remember to follow the application process diligently and provide all necessary documentation.

4. Review Health Insurance Options

Losing a job often means losing access to employer-sponsored health insurance. Research your options, which may include purchasing insurance through the Health Insurance Marketplace, COBRA coverage, or Medicaid. Ensure you and your family’s health needs are covered during this transition.

5. Contact Creditors

If you foresee difficulties in making loan payments or meeting other financial obligations, contact your creditors. Many creditors are willing to work with you to establish modified payment plans or deferments during times of financial hardship which is common now because of runaway food prices and high energy prices.

6. Build an Emergency Fund

If you don’t already have an emergency fund, consider building one as soon as your financial situation stabilizes. An emergency fund can provide a safety net for unexpected expenses and job loss situations in the future.

7. Seek New Opportunities

While managing your finances is crucial, your career is equally important. Begin actively searching for new job or business opportunities. Update your resume, utilize online job boards, and reach out to your professional contacts to explore potential openings.

8. Avoid Impulse Spending

During periods of uncertainty, it’s essential to curb impulse spending. Make well-considered financial decisions and prioritize needs over wants. Avoid making major purchases or incurring unnecessary debt – remember – you are not the federal government.

9. Consider Freelance or Gig Work

If finding a full-time job proves challenging, consider taking on freelance or gig work to generate income. Online platforms offer opportunities in various fields, allowing you to monetize your skills while seeking permanent employment.

10. Explore Additional Income Streams

Explore creative ways to generate additional income. This could include renting out a spare room, selling unused items, or offering services like tutoring, consulting, or freelance writing.

11. Reevaluate Your Financial Goals

Your financial goals may need to be adjusted in light of your job loss. Temporarily shift your focus toward stabilizing your financial situation and then recalibrate your goals as you regain financial stability.

12. Seek Professional Financial Advice

If you find yourself overwhelmed or unsure about your financial decisions, seeking advice from a financial advisor can be immensely helpful. They can provide personalized guidance based on your unique situation and goals.

Bonus Tip: Skill Enhancement and Networking 

While the immediate focus might be on financial adjustments, don’t neglect the importance of skill upgrading and the power of professional networking during this period. Use your free time to acquire new skills or enhance existing ones. Online courses and certifications can not only make you more marketable but also boost your confidence during interviews.

At the same time, leverage online platforms, such as LinkedIn, to connect with professionals in your field or industry. Engaging in discussions, attending webinars, and participating in virtual events can expand your network and keep you informed about industry trends.

Proactive Financial Steps can Help You Emerge Stronger

Losing your job is undoubtedly a challenging experience, but taking proactive financial steps can help you weather the storm more effectively. By assessing your situation, managing your budget, exploring income-generating opportunities, and seeking professional advice, you can navigate this phase with greater resilience and set the stage for a more secure financial future. Remember that adaptability, resourcefulness, and careful planning are your allies in overcoming the financial challenges that come with job loss.

Finance, Money

How To Avoid These 7 Budget Disruptors In 2023?

by Benjamin Roussey|Posted on | 4 minute read | Advertiser notice
Budget Disruptors

Budget busters are quite different from your regular monthly expenses. These are extra, unexpected indulgences that get added on top of the essential things you need to get by. Whether you’re new to adopting a cost-conscious lifestyle or hoping to brush up on the latest budgeting strategies, here are some of the notable budget disruptors you should be mindful of and how you can deal with them.

App Purchases

App purchases are easy to make without thinking about how much they cost. And once you’ve spent money on apps, they’re even easier to justify because it’s just a couple of bucks. Of course, who can resist when an app feels like it’s just a dollar? You’ve probably downloaded apps that you thought were free, only to be greeted by the dreaded “Buy Now” or “Upgrade to Premium” button.

Sift through your mobile apps to ensure that your purchases aren’t subject to in-app purchases. If you are on a budget, be mindful of how many apps you upgrade in a month.

Buying Coffee Every Day

While it’s true that coffee can be a delicious, life-giving force, it can also have an insidious way of taking over your life if you’re not careful. For one thing, it’s expensive—at $5 per cup at a typical coffee chain, you might spend $30 or more per week on coffee alone. That’s a hefty amount to be forking over for the privilege of staying awake.

Instead of going down this slippery slope, take advantage of free coffee from your office. You can also invest $20 in an insulated travel mug that keeps your coffee hot for hours. Not only will this save you money by limiting how much you spend on coffee each day, but it can also have positive effects on your health.

Credit Card Interest Charges and Fees

It’s easy to fall prey to an exorbitant credit card bill when you don’t know how to avoid the extra fees. Interest charges are often the most common and least-understood culprit of high credit card bills. Besides, many people don’t know they’re paying thousands of dollars in hidden expenses because credit cards levy extra fees for late payments, returned checks, foreign transactions, and so on. Even if the economy is roaring like it was in 2017 and 2018, for instance, this is not something to write home about.

The easiest way to avoid these charges is to pay off your balances in full each month. If this isn’t possible, try to manage your balance to stay as close as possible to zero. And no matter your situation, be sure to track your credit card activity regularly so that you know exactly what’s going on with your accounts.

Movie Rentals and Streaming Subscriptions

As the cost of cable continues to rise and the availability of content on streaming services increases, more and more people are choosing to watch movies or shows with a digital subscription. The convenience of watching whatever you want from the comfort of your home is hard to beat. Based on this, this change in viewing habits can be costly.

Always return all movie rentals (Redbox) on time. If necessary, set a reminder on your phone to notify you when the due date is approaching. You can also switch to cheaper streaming services for entertainment.

Flash Sales

When you’re on a budget, taking advantage of a flash sale can be tempting. For example, a website offers a product you want at a meager price—such as $40 off an item that normally retails for $200. You might even justify it by saying, “It’s a one-time thing, and I need the product, so I’ll just buy it now.” But then you get home and realize that the budget you set for yourself was actually $100—and now you have to make up the difference.

The best way to combat this is to set your budget before shopping. Don’t let extraneous items squeeze your budget to the breaking point. Think of flash sales as something fun to browse—but always set your budget first. This is even more important in times of high gas prices and runaway inflation.

Eating Out Too Often

Eating out and ordering in can be a way of life for many people, but staying mindful about your spending is essential. Every time you eat out, you’re paying for the labor involved in preparing and serving your food and any costs associated with utilities & maintenance. So even if you’re not eating out every day, it can easily slink into your budget, whether grabbing lunch during your break or treating yourself to a night out with friends.

Reevaluate your habits. Instead of going out for lunch daily, pack a healthy sandwich or salad at home and bring it in a lunchbox. Order a less expensive item from the menu, such as soup or salad—instead of ordering an entrée or appetizer to save money on dinner.

Charitable Donations

The appeal of charitable donation buckets at stores and shopping centers is undeniable, but often you don’t know where that money is going or how much of it will actually get there. While donating a few dollars here and there might feel good, it can add up to a significant amount over a year.

Don’t feel pressured into giving money to charity just because the cashier in the mall wants you to. If you have already budgeted for charitable donations, then that could be enough. You should look at legitimate charities such as The Knights of Columbus or the American Legion, for example.

Finance

5 Steps To a Financially Strong New Year

by Benjamin Roussey|Posted on | 4 minute read | Advertiser notice
Financially Strong

Many people make New Year’s resolutions to become more financially fit. After all, financial fitness is indeed vital to achieving happiness and security in life. But building passive income, investing for retirement, lowering debt — these types of resolutions are harder to accomplish. Here’s a five-step plan to help you develop the habit of creating and sticking to long-term goals and change the course of your finances for years to come.

Reassess Your Budget

As high inflation has forced many households to allocate more for essentials like groceries or gas, it’s imperative to reassess your budget as part of this process. You may be surprised by how much you’ve changed since creating your last budget, or you may find that your current budget is still perfectly suited to your needs. Either way, it’s worth taking some time to evaluate where you are now and what you want to get out of the upcoming year.

First, list all your income sources, including salary, bonuses, and dividends from investments. Next, do the same for your expenses—this will probably include fixed and variable costs. Finally, consider what you want to spend money on in the coming years—it’s often helpful to divide this into goals like saving for retirement or buying a car in the next few years. Remember, you cannot just spend money like the federal government does and worry about paying it back decades from now. We all wish we can print money like the feds do but we simply can’t.

You can create the perfect budget by creating a complete picture of what you have available, where it’s going, and how much you want it to go toward future goals.

Create an Emergency Fund

An emergency fund is an important aspect of any financial plan because it helps protect against unexpected expenses and liabilities. Accidents, illnesses, or other unforeseen circumstances can throw off any household’s balance sheet. Having an emergency fund will ensure that unpredictable circumstances don’t derail your goals. 

Set aside enough money in a savings account or certificate of deposit to cover three months’ worth of expenses—including fixed costs like mortgage payments and variable expenses like groceries. If this seems like a lot to put away every month, start with whatever you can afford—you can always add more as time goes on. Just remember to keep your emergency fund separate from other accounts to avoid dipping into the account for non-emergencies.

Manage Your Debt

There’s no point in waiting to tackle your debt after the holidays. If you carry balances on your credit cards, daily purchases can quickly snowball into long-term debt that could take years to pay off—or even require you to shell out more money in interest than the original sum of the purchases you made. But if you anticipate a year-end bonus or raise, why not use it to pay off your high-interest debt first? 

Next, consider consolidating your remaining debt into a single loan with reduced interest rates. With refinancing, you might get one monthly payment instead of managing several different credit accounts with varying due dates and minimum payments. 

Taking action early in the new year will give you time to make adjustments before the next set of bills rolls around—you’ll have more control over your financial situation which is vital during the era of high costs. In 2018, for instance, we did not have these issues, but they started to be relevant to us in 2021 and they may not go away until 2024. Maintaining harmony in your financial life is critical for more reasons than one. 

Optimize Your Portfolio

If you’re like most people, your portfolio might be split up among mutual funds, retirement accounts such as IRAs and 401K, stock certificates and the like. You may even have a few individual stocks. A well-balanced portfolio, or a mix of investments, does more than just keep your money safe and grow over time which is vital during a time of high gas prices. We may have high gas prices until 2024 when we can start to drill again but this is even more of a reason for you to invest properly and to save money. 

It also ensures your hard-earned cash is working for you at an optimal level to give you control over your finances. Evaluate and reevaluate every asset you own, from stocks to real estate to any other financial asset, for its potential and risks. Get rid of any investments that aren’t working for you. But don’t make any drastic changes to your portfolio until you’ve given yourself enough time and information to feel confident in your decisions.

Prioritize Your Wellness

The rising cost of healthcare because of the lack of competition can make anyone anxious. It’s no longer a small bill at the doctor’s office; it is an enormous debt from healthcare plans, prescriptions, and other necessary treatments to maintain everyday life. While they say good health is priceless, there are undeniable facts that prove that this expensive commodity has a hefty cost as well. So, make sure your insurance plans have been reviewed. 

Having a plan for where you and your family will be covered for healthcare should be a priority. Review your long-term financial health next. This is one area we don’t tend to pay enough attention to, even though it’s probably the most crucial element of our finances. And because we’re living longer and working longer, keeping our minds and bodies healthy is just as crucial to our personal welfare as making money is to our financial well-being.

Finance

5 Steps To Create A Personal Budget

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Personal Budget

Every dollar you earn and every minute you spend is an investment. Your budget tells you where your money goes each month and can help you gain more control over your finances. Follow these steps to make personal budgeting quick and easy.

Step 1: Determine Your Net Income

Your net income is the foundation of a well-planned budget. In other words, it is your take-home salary after deductions for taxes and employer-provided benefits like retirement plans and health insurance. 

Remember, relying on your total salary instead of your net income may make you splurge. You’ll mistakenly believe you have more money than you have. Maintaining detailed records of your agreements and payments can help you manage unpredictable earnings if you are a freelancer or a self-employed person.

Step 2: Find Your Savings Rate

You get your savings rate from the difference between your earnings and expenses. It defines your financial stability and wealth. The savings rate shows you how much of your earnings you can allocate each month toward accumulating wealth.

Keep a savings rate target of 10% or more of your net income post-tax. Depending on your financial goals or if you wish to retire early, you should increase your savings rate and build a passive income from it which can help you in times of high inflation and runaway food costs.

Also, you can use your monthly savings to pay off unsecured debts, such as credit card debts or personal loans. Next, enroll for a secured credit card. How you achieve your savings goal is the rest of the budgeting process.

Step 3: Make a Spreadsheet for Your Budget

Creating a basic monthly budget doesn’t need you to be an Excel expert. It’s not even necessary for you to build your template; you can use the worksheets on Google drive.

The spreadsheet should have four categories: savings, income, expenses, and a financial summary. But first, write in your savings goal that you’ve already determined. Next, you can start mapping out a course to get to that savings rate.

Pro Tip: You can sign up with Tiller or check out Microsoft 365 for customized templates and easy budgeting on Google Sheets or Excel.

Step 4: Identify Month-to-Month Expenses

The two main expenses you incur each month are essential (unavoidable) and optional (avoidable) expenses. You can cut back even on the essential expenses to some extent. Based on this, the distinction between necessary and optional spending is a helpful reminder of where you have the most flexibility to save in your monthly budget.

Essential Expenses

Although there are inventive ways to cut or evade these necessary costs, most financial experts call them unavoidable monthly living expenses. 

  1. Accommodation: Think about how much you can afford while still being satisfied rather than how much you can spend.
  2. Transportation: If you want to amass a fortune, buy the least expensive car. 
  3. Groceries: To survive, you must eat. Moreover, you do not need a gourmet feast every day – not even every week. Once a month is more like it when gas prices are what they are.
  4. Utilities: You will require internet, water, power, and possibly gas. Still, you can reduce utility costs through sustainable living. 
  5. Medical care: You can use benefits, choose a preferred provider option (PPO) based on your insurance plan, pay in cash, or even request discounts.
  6. Child care: For under-school-age kids, you can hire babysitters instead of nannies, swap responsibilities with family or friends, or have play dates.
  7. Debts: Pay off unsecured debts like credit card bills and student loans as soon as possible. 

Optional Expenses

Remember that you have total control over these costs. Anything you spend on the below items should be the bare minimum and only if you can’t live without them. The list includes:

  • Food: restaurants and takeout
  • Shopping for clothes or accessories
  • Cosmetics and personal care
  • Electronics
  • Alcohol and tobacco
  • Gifts
  • Travels
  • Entertainment

Step 5: Review Your Budget Regularly

It’s essential to regularly review your spending to make sure you are staying on track. No budget is set in stone; it can change. For instance, your spending might alter, you might get a bonus, or you might achieve a target and decide to create new goals. Whatever the reason, establish the practice of periodically reviewing your budget using the methods above. Here is a practice you can follow: 

  • Keep a track of monthly expenses
  • Understand your spending pattern
  • Adjust expenditures to must-haves and eliminate luxuries

Closing Thoughts

It’s simple to create a budget, but changing your spending habits is the tricky part. There are several ways you might hold yourself accountable for deviations from your budget. To begin with, you can activate notifications for your bank and credit card accounts to remind you when you hit a set spending limit. Learn to live frugally, which means not buying things you cannot afford. It constitutes the foundation of successful personal budgeting.

Finance, Money

5 Things You Must Know to Take Control of Your Budget

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Control of Your Budget

Managing your finances can be extremely rewarding, but also challenging. If you’ve never tried to budget before, then it can be hard to figure out how to make it work for you. That’s because many factors affect your budget, which can seem quite complicated. But once you break out of old habits and learn to focus on the things that matter most, it’s possible to have fun with your money and save up at the same time. Below are some tips for mastering the budget game.

Know Your Numbers

The first step in budgeting is figuring out where your money is going now — and what you can cut back on. You can’t control your money if you don’t know where your money is going. Start by tracking your spending for a month or two so you have an accurate picture of your income and expenses. You can do this manually, like write everything down in a notebook or use free apps to help keep track of your spending and see what areas of your budget need tweaking.

If you get paid weekly, write down each paycheck every time you get one — don’t wait until the end of the month to do it all at once. This is especially important if you have an irregular income. If you only get paid once per month, once per quarter, or something similar, then write down each payment along with any other transactions. You’ll also want to ensure you’re getting the most out of any credit cards or rewards programs.

Set a Goal for Yourself

Once you know how much money is coming in and going out each month, set a realistic monthly savings goal. For example, if you want to save $500 per month, then plan to spend $500 less than what comes in each month, assuming there are no unexpected expenses.

If possible, try to set aside extra monthly money, say $100, which goes straight into savings without being touched until the next month rolls around. This will help build up your savings account quickly without taking away from other priorities like paying off debt or contributing toward retirement accounts.

Set aside Sinking Funds

A sinking fund is an accounting measure used to allocate funds for an ongoing project. The money is put aside for a specific purpose, such as paying off debt or paying for something in the future. It allows you to set aside money always to have it available for your project. They can be used not just for savings purposes but also for working towards a specific goal, such as saving for college funds because society spends enough on K-12, it just cannot afford to pay for peoples’ college pursuits.

The alternative approach would be to put extra money towards the debt monthly, but in practice, this may not happen because people overspend their normal limits and have nothing left to add to their debt repayment plan. A sinking fund is a way you can pay down your debt and have extra money built up in reserve if you ever fall short on funds which can happen in a high gas costing, inflationary environment.

Anticipate Irregular Expenses

We set budgets for the many things we purchase throughout the year. But one of the most critical areas to budget for is irregular expenses. Inconsistent expenses are just that – not every month or six months, but only once a year, such as saving for festival gifts, vet visits, or medical check-ups.

It is essential to plan for these as they can seriously impact your cash flow and should not be overlooked. Forgetting to add these into your initial budget could make a difference between having money in your account and not.

Automate Money for Savings

Saving money can feel like a challenge. It’s hard to remember to do it every day and don’t even think about saving in between paychecks or on paydays. By automating your savings, you can ensure that you’re saving and setting money aside for emergencies or larger goals like retirement. Saving money on an automatic deposit can seem daunting at first, but once you get into the routine of saving on auto pilot, it becomes second nature. Once you’ve taken the first step of linking accounts and setting up automatic deposits, all that’s left is sticking to it and ensuring that each account has enough money in it so that transactions are completed successfully and without error.

Finance

Personal Finance Tips to Follow When You Get Your First Job

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Personal Finance Tips

Congratulations! You have landed your first job. It is an exciting time full of new experiences and challenges. Even as you are going about your responsibilities in the new job, you are probably looking forward to your first paycheck and have already begun a list of things you want to buy.

This is the right time to exercise some caution and have a concrete financial plan in place which is vital in a rising cost and tax environment because of new policy. Developing sound financial habits from your first job will stand you in good stead as you grow your career. Here are a few tips on how to manage your money right from the first paycheck.

Write down your financial goals

It’s critical to write them down as that will bring you greater clarity. Make a note of both short and long term goals. It is all right if your goals change at some point or when you have met one of your short term goals. You are doing this to help you plan your budget and to know how much to save and how much to spend.

Make a budget

You know what your income is and you know your priorities. Some expenses are unavoidable. Set aside a portion of your income to meet those expenses. With the leftover money, you can exercise a greater level of control and where it goes. Remember, you have a goal. Put aside another portion of your income towards that goal.

Keep track of your accounts

You may want to do it once a month or bi-weekly. It will keep you on track with your spending without running short at the end of the month. Keeping your checking accounts balanced will also ensure that there have been no unauthorized debiting of funds. 

Start saving

It is never too early to start saving. Set up a retirement fund from your first job. If you are only able to set aside a small portion of your income towards a 401K offered by your employer or any other available retirement funds, it is still alright. Ideally, you should plan to invest 15% of your income to this fund but you may want to consider investing more with higher energy prices and other costs that are rising in this new environment. 

Shop wisely

If you must shop, shop wisely. Make a list of things you need and stick to the list instead of getting tempted into impulsive buying. It will help if you make a separate list of things you want to buy and mull over the items for a day or two. You may realize that you can do without some of them, or at least prioritize your shopping list between the things you need and the things you want. 

Find the best deals

Scouring the various deals online would give you an opportunity to compare prices and choose the best deal. This is a smart habit to cultivate. There are plenty of deals on every item in the market from clothes to household articles. You will save quite a bit of money by doing your research before shopping. 

Irregular expenses

If you have a desire to travel, you may choose to set up a holiday fund and start adding to it with each paycheck. You will enjoy the trip more when you know that you are not dipping into your funds set aside for necessities and other savings.  

Incidental expenses

It is always best to be prepared for the odd incidental expenses that may come up. It could be as small as your phone bills or tips to porters. Or, it could be the odd repair work that needs attention. Keeping such expenses in mind will ensure that you do not sway from your original budget.

Watch your credit report

You do not want to be caught unawares when you are building your credit history. It is essential that you keep an eye on the credit report regularly as it will help ensure that you are not slipping to a lower rating because of some oversight in settling your bills. 

Monitor your progress

Every couple of months, you could study your accounts and compare the expenses incurred. It will give you a better idea as to your spending and saving. You can also plan for an improved lifestyle as you grow in your career and your income increases. 

The bottom line

Armed with these tips, you can feel secure and in control of your finances. No one can have a better idea of your needs and wants. Stay focused on growing your wealth as your income grows while you progress in your career. 

Finance, Lifestyle

Best Practices to Take Control of Your Personal Finances

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Personal Finances

You could win the Powerball jackpot and still end up broke simply because you did not manage your money well. You could also be earning a huge salary and find that most of the money’s gone before the month is out, leaving you strapped until the next paycheck (Allen Iverson almost knows about this – as do many others). That’s why it is good to be proactive and take control of your finances instead of asking yourself where the money went.

Here are 10 prudent tips to help you manage your personal finances effectively.

Set up separate bank accounts

You must set up a savings account and a checking account as soon as you land a job. Keeping your salary in these 2 accounts will ensure that you only spend the money from your checking account leaving the savings account intact for future goals.

Save first, spend later

Make sure that you have set up automatic withdrawal and deposit on the same day that you get paid. The deposit might go towards a retirement fund or an emergency fund. Do not miss out on the retirement plans offered by your employer (even the US military has TSP). What is important is to not wait until the end of the month to make that saving. Your spending budget should not take your entire income into account. Automatically moving a percentage of your income first will make sure that you can only access the spending money you have allocated in your budget.

Set up short and long-term financial goals

It is always best to set specific goals, for instance, do you want to buy a property when you reach a certain age? Do you have a clear idea of how much it will cost, even if it cannot be an exact figure as land and property prices can fluctuate? Then, count backwards to calculate the amount you will need to have on hand when that time comes and start saving. It will help to write your goals and the saving plan and place it where you can see it regularly.

Budget

Make a budget and stick to it. This is an important step to take if you wish to be in charge of your finances. When you list down your monthly expenses, you will find that it helps to know the bills that are to be paid routinely and the amount that is left over for saving, investing, or extra spending. This is vital when taxes and costs for goods are increasing because of new policies.

Monitor your spending

Once you know your monthly income and your budgeted amount for monthly bills, you will have a clear picture of how much money you can spend. This requires careful monitoring because it is way too easy to spend money thinking that you can just because you have paid all your bills. This will also help you see if there is an expense you can do without.

Live within your means

It is frugal living that fattens your bank balance. When you understand that you are not deprived of anything by living within your means, you will also realize that it is pretty easy to maintain a lifestyle that takes care of your needs without going overboard.

Set aside money for emergencies

Set aside some of your income each month towards emergencies. If there are no emergencies, you can be happy with the fact that you have saved a lump sum. If there is an emergency, you won’t have to panic and wonder where you will get the money from.

Educate yourself

You would do well to keep abreast of the latest tax laws to make sure that you maximize your savings. Keeping yourself well informed of the stock market and following the financial news will allow you to find safe investment opportunities.

Go for the discounts

There is no shame in looking for discounts and taking advantage of the offers made by retailers. If possible, take a more direct approach and master negotiation skills by working with small businesses. It can be a win-win for the business and you. Buying in bulk could get you a discount just as much as a long term relationship with a vendor. The idea is to avoid wasteful spending.

Take care of your health and property

Health – The body can throw in a lot of surprises along the way. It is best to be self-aware and maintain a healthy lifestyle. Make sure that you schedule regular doctor appointments, including dental care. Eating right and exercising will also keep you away from avoidable health risks.

Property – Regular upkeep and careful handling of the things you own, big and small, can shave a lot of repair costs from your monthly expenses. This is a great habit to cultivate and will also teach you to value what you own.

Regardless of how much money there is to manage, these tips can help you stay on top of your spending and saving, and leave you financially secure.