As you try to look over money tips to help you manage your finances better, you will be sure to come across quite a few with a lot of people giving their own two-cents worth on the topic. It can come from their own experiences in life as they go through their financial journey, it can come straight out of a book or it might even be just an advice they overheard that made a lot of sense for them at the time.
These tips are important in your own financial journey especially if you already have an inkling that you are headed for debt problems down the road. This could be because you are spending more than what you are earning or just simply not having any financial direction in your life. You live one day at a time without any future goal in life and this often leads to wrong and uninformed decisions that ultimately affects your finances.
Nerdwallet.com shares that an average household debt can total up to $130,000 covering mortgage loans, credit card debt, student loans and others. This is a big amount for any household and would take years to pay off on an average salary. This amount can set you back especially if you have financial goals that you cannot reach because the monthly payments on your financial obligations are pulling you back.
Money tips to look into
Apart from creating a budget and guarding your expenses, here are a few more tips you can look into to help you with financial management.
- Consider investments to make your money work for you. You need to put in the work to earn the reward but there are times that you need to be smart about it as well. One example of this is how you use the money you get after you have worked hard. If you just put them in a savings account all these years, you are wasting away potential earnings on the money. You need to look into investments to make your money work hard for you as well. Depending on your risk level, you can put your money in high yield high risk products, low risk low yield tools or just somewhere in the middle.
- Understand the importance of having a reserve fund. There is no way that you will be able to predict the future and what happens then. You might have a rosy and beautiful paid job today but you can be in the chopping block in just a few year’s time. This underscores the importance of having some form of reserve funds in your financial arsenal to get you through these tough times in your life. Having enough money saved up which can cover your finances for a few months as you look for a job will greatly help you manage your stress level and allow you to focus on job hunting rather than your day to day expenses.
- Take care of your health. Forbes.com shared recently that the annual healthcare expense for an average family of four could sum up to a little over $20,000. That is a steep amount when you come unprepared but if you are proactive enough that you take care of your health, you get to take away two things from it. First is that you get to save a lot of money from healthcare costs as you drastically eliminate the need for constant doctor’s consultations and even over the counter medicines. Secondly, you get to be more productive in whatever field you are in. You get to take less sick days and be more effective with your time rather than just sleeping in and becoming best friends with your blanket. This is one of those money tips that you should not belittle in your quest to improve your finances.
- Set a regular date to look over your finances. As most people would tell you, the devil is in the details and one effective way of falling victim to this is overlooking regular check ups on the things that matter to you which in this case would be your finances. You have to schedule a regular date for going through your budget, your investments and even your financial and career goals. This keeps you on top of the situation and allows you to analyze patterns that can lead to big problems down the road. It could be that you have been using a return rate on your investments from market situations in the past and your projections are already way off or that account you used to automatically pay for your bills is nearly depleted and you have to put in additional buffer to cover the payments it supports.
- Be wary of lending money to people. There are a lot of ways to grow money but lending it to people is one of the trickiest things you can do. There are some consumers who prefer to just give money rather than loan them. If a family member or a close friend is borrowing $1,000 for a medical emergency, they would rather just give them $200 to help and not worry about being repaid in the long run. Apart from riding themselves of the stress of having to ask people close to them to pay up, they also get to help and maintain the relationship. Of course this is not for everyone and you need to look at every situation differently and assess if you can extend a loan to them or not.
- Impart financial wisdom to your kids. This is an often overlooked aspect of financial management and planning. You need to teach your children about personal finance and money tips so they can handle it and make informed decisions as they get older. Teach them how to recognize bills at a young age and push them to try putting a lemonade store up so they can learn. Tell them about credit cards and student loans as they get older so they can manage expectations and be able to make better decisions for themselves. This also lessens the chance where they ask you to bail them out financially because of mistakes you could have told them about early in life.
- Save as early as you can. USAToday.com explains that compound interest starts working its magic as soon as you make that initial investment. It is a great thing to take advantage of at this day and age where people are always on the lookout for something real, tangible and has a quick turnaround. People wants to see results and saving early and taking advantage of compound interest will yield results. It can help you reach your savings goals faster and give you the opportunity to make your investments work hard for your dreams.
- Understand your expense triggers. You need to understand that there are reasons why you spend the way you do. Did you see on tv that your favorite star is sporting a new handbag and you go out to the mall to buy it? Did you notice that new car parked on your neighbour’s garage? Do you splurge out on shopping for new clothes because you had a bad day at the office? As soon as you identify the trigger, you can need to work on curbing it to help you manage your finances better.
These money tips will be great addition to your arsenal of tools that you can use on a daily basis in managing your funds as you inch closer to your goals in life.