Honestly speaking, finance can prove to be a foreign language to most Americans. With debt continuing to rise and retirement funds continuing to dwindle instead of daydreaming about retirement in the Bahamas, Americans find themselves pulling their hair out wondering if they can make it until their next check. Not only can money be managed much easier than expected but money can be managed by You and you alone. Fortunately it doesn’t take twenty years of accounting to understand where your money is going and how keep it in your pockets. The following tips is a good start to get anybody’s finances in check.
Everybody has heard of this but few of us actually do it. Saving your money can lift a huge financial burden off of your shoulders. Saving money helps you with miscellaneous expenses, paying off debt, and eventually retirement. The best way to start saving is to open a savings account and have a small portion of your check direct deposited into it. By doing this you are effectively starting to save without the burden of manually parting ways with some of the money from your check.
Know Your Credit Score
This can be intimidating. Just relax sip on your favorite alcoholic beverage and see where your credit stands. Credit scores can make or break how you manage your finances. Don’t get discouraged if your credit score is lower than expected. There are too many ways to fix credit to just give up on salvaging it entirely. Improving credit scores can lower interest rates, boost lines of credit, and broaden your financing options. The more financing options you have, the less you have to deplete your own funds to pay for the things you need.
Improving your credit score is essential for financial freedom, and knowing where you stand is half the battle.
People have a hard time managing money because most of the time they don’t know where it’s going. Budgeting is not only perfect for reinforcing your saving habits but it’s also beneficial to track how your money is being spent. Although this may seem tedious, frivolous spending will come to a standstill once you discover how much money you’re losing. You can start budgeting by by using an excel spreadsheet or just by old fashioned pen and paper to keep track of your spending. See what your comfortable spending on and where you need to make cutbacks.
Many think that investing is a huge risk that is not worth the reward. However there are products within the market that are FDIC insured so you won’t lose your initial investment. Thus the higher earning potential without the risk. Even if you don’t want to invest a substantial amount it’s still a huge benefit to learn about the stock market and how it works. With the right investments your money will multiply in your sleep and that passive income has the potential to substantially raise your cash flow. Investing can also secure your retirement. Without company programs like 401k’s many people wouldn’t be able to retire.
Become Financially Literate
You do not have to be a financial guru in order to understand what’s going on with your finances. This is the most important tip because without financial literacy you’ll increase your cost, pay unnecessary fees, and make financing a lot more difficult than it should be. Understand how much you’re paying in interest, estimate (as accurately as possible) your ROI in the investments you make, know what financing options come with and without fees. The more you know about the financial situations you’re getting into the more money you will save.
Guest Contributor: Alan Burton
Alan is a household renowned penny pincher that takes pride in saving people money and managing finances. He’s spent years in banking and using that knowledge to promote more traffic for blogs, provide insightful financial content, and most importantly save readers as much money as possible. Check out https://www.alanorlandoburton.com/