Just how difficult is to keep personal finances under control? A lot of have issues paying back their debts and some simple suggestions help you stay away from financial troubles.
Create a realistic monthly budget and stick to it by periodically reviewing the budget against actual expenditure and suitably re-adjusting spending habits.
Avoid impulse buying for anything not planned to buy or actually needed. Return home, think it over and the purchase can be avoided.
Don’t buy something if it’s on sale. Buying a $500 item for $400 isn’t a $100 savings if you didn’t need to buy it. It’s wasting $400 unnecessarily and possibly not on a real sale as stores mark items down, so people feel they secured a bargain. Learn to take control of finances by learning basics of funds management.
Get medical insurance if possible, including a stopgap policy with large deductibles, if a medical crisis comes up. Medical emergencies are unavoidable, but life without medical insurance is basically an invitation to financial disaster. And if you go to the emergency room when something dire comes up, some basics are: 1) Chronic conditions like cancer are not covered, and 2) While the emergency room cannot stop treatment due to lack of insurance, they expect bills payment later.
Charge items if you afford to pay now. If you don’t have the cash, never charge based on anticipated income, as future income may not materialize. Meanwhile, you pay exorbitant interest rates, which wipe out savings that you may gain by buying items on sale! Toss all your credit cards into a drawer, lock it and prepare to live without credit for sometime.
Avoid large rent or house payments. Commit payments for what you can afford and increase mortgage payments only if income increases. Consider refinancing or apply for loan modification if your payments become unmanageable.
Avoid guaranteeing or co-signing or a loan for others. Your signature renders you liable as if you are the primary borrower. You aren’t sure if the other person actually pays.
Avoid joint obligations for people with poor spending habits– even for a spouse or sibling. By incurring a tax bill or joint debt, you are liable if the person defaults. Such liabilities have even outlasted relationships.
Avoid high-risk investments such as speculative real estate, junk bonds and penny stocks. Invest in safer certificates of deposit, government bonds and money market funds.
Search alternatives to spending money. For a birthday, organize a picnic rather than an expensive restaurant. If a lunch meeting is suggested, propose a museum meeting on its free day or a walk in the park. Instead of buying books, rental videos and CDs, borrow them for free from a library.
Establish order by keeping all financial paperwork in the same place, preferably online. Keep track of payments and due dates. Check your statements for inaccuracies and unauthorized credit card purchases, as credit card fraud and identity theft are rampant. Set up automated bill payments through online banking and organize bank accounts as under:
- Update contact information with Your financial institutions
- Communicate with creditors to ease financial problems
- Negotiate a payment arrangement to ease debt repayments
Money matters won’t bring on stress and anxiety anymore when you have more time to focus on things that bring joy and satisfaction.