Are you tired of winging it? You know, just letting your family’s financial chips fall where they may because it seems so much easier than actually thinking about your spending habits? Sadly, you are in the majority; most Americans do not properly budget their expenditures. A proper budget can bring with it a host of positives: less debt, more money for college and retirement, to name but a few. But just having a budget is not enough in and of itself: you must also avoid the common mistakes that budgeting can sometimes lead to.
If you’re ready to take the next step – to really buckle down and track where the money’s going with an eye toward righting your ship for a more secure journey into the future – you’ll want to read this list of ways the budgeting process can go wrong. Then, just do the opposite!
- Not Using Family Budgeting to Help Pay Off Debts
It’s great that you’ve decided to start budgeting and it’s even better that you’re sticking to it. You’ve discovered that getting a handle on your spending has freed up additional money every month. Now is the time to go the final step in the process by using those new-found resources to pay down whatever debts you may have. Think of it this way: you’ve stopped the bleeding, now it’s time to heal the wound. If you’ve only been paying the minimums on your credit cards, start throwing more money at them. If you’ve got a high-interest rate, long-term loan on your car, start paying more than what is required in order to shorten the loan and lessen your interest burden. Failing to pay down debt as part of your new budget is one of the biggest mistakes you can make.
[click to read…]
It seems that every day, there is a new article on debt. For instance, there are published reports which indicate that America is currently in $2.4 trillion of consumer debt, 1 in 10 consumers have more than 10 credit cards, and the average household debt is around $10,000. When you take all of this information into account, you can see why it’s so important to do all that you can to keep your personal finances in order.
If you’d like a few tips on things that you can do to become or stay financially responsible, here are five proven tips:
Create a budget. One of the best ways to avoid overspending is to have a monthly budget put into place. That way, you are clear on how much money you have to spend beforehand. If you’ve never created a budget before and you’d like a few tips on how to make the kind that will keep you financially responsible and out of debt, visit Money Counts and put “create a budget you can stick with” in the search field.
Avoid credit card debt. There’s nothing wrong with having a credit card. In fact, if you use it wisely, it can boost your credit score. The thing to keep in mind when it comes to credit cards is if you rely on them for most of your purchases, you will end up with interest rates and other financial fees that could cause problems down the road. For this reason, try and make it a practice to use cash or your debit card as much as possible. And when you do charge something, pay off your balance, in full, the following month.
[click to read…]
Most people experience financial trouble at some point in their adult lives. And this is often at least partially due to the fact that many of us are never taught how to properly manage money. Over time, bad decisions can turn into bad habits where spending and saving practices are concerned. But you can break the cycle. Here are some tips that should help you to break your bad money habits.
Track spending. You can’t possibly hope to break your bad habits without awareness. You probably have some inkling of what you’re doing wrong, especially if you like to shop without stopping to consider whether you really need the items you’re purchasing. And to be honest, one of your worst habits could be shopping without oversight simply because you know good and well that stopping to think about your purchases would sour the shopping experience. When you truly track your spending you can’t help but see where you’re making mistakes when it comes to unnecessary purchases. So becoming more aware is an essential part of determining what your bad habits are so that you can address them accordingly.
[click to read…]
For many people the mention of personal finance is akin to some unsolvable puzzle that bothers them at odd times. The thought of sitting down and planning expenditure is scary, and the idea of pre-paying the credit card bill, an alien concept. Such people are sitting ducks for target practice when finances go awry. It is in your own best interest to learn how to handle your personal finance matters effectively. Here are some tips that you can use.
Be Aware of Income and Expenditures
In order to understand your finances you need to know what money is coming in and on what it is being spent. It is a good idea to sit down with a pen and paper and list just how much money you have access to each month. Include the money that comes from your salary, any interest you get on savings, and any other sources of income you may have. Even if it is an irregular source of income, make sure you record how much you earn from it. Similarly make a list of all the main expenditures you undertake monthly. The rent, utilities bills, school fees, groceries, and medical expenses; make sure you list everything. Specific annual payments such as insurance and taxes should also be included on the list. You can revisit the list at a later date when you remember some that you originally missed.
[click to read…]
Many college students are not well-equipped to make sound financial decisions, and there are a couple of reasons why. For one thing, they haven’t had to manage their own finances to this point. Even those that have held a job or had to maintain an asset like a car have had help from their parents. Very few students reach college with the experience of paying for rent and utilities under their belt. But even worse is the fact that they have received little to no education on the subject of personal finance. They might not even have a bank account, much less the knowledge needed to earn, save, budget, and build credit. Unfortunately, this makes them prime targets for credit card companies, who swoop in to offer young adults what seems to be “free” money, but actually comes with unfavorable terms such as high interest rates, annual fees, and more. So if it happens that you’re not particularly savvy when it comes to financial matters, here are just a few guidelines to help you make wise decisions during your time in college.
The first and perhaps most important lesson is that you must live within your means. This can be a tenuous undertaking when you are forced to take on the debt of student loans, you are living off your parents, or both. But you’re now an adult and it’s high time you learned how to handle your money in a responsible manner. And the easiest way to start is by creating a basic budget. You know what your expenses are, and if you don’t you should sit down with your parents to figure it out. Your list should include tuition, fees, and related expenses, as well as dorms, a meal plan, and other living costs. If you have a car, you’ll need to include loan payments and all associated costs such as registration, insurance, fuel, parking, and maintenance. And you’ll no doubt have other items to add.
[click to read…]
Do you know why your budget is not working the way it should be? The biggest reason why budgets don’t work is because the people who are controlling the budget don’t bother to stick to what they put down on it. If this is you, then you either need to stop this or decide to stick to the budget from now on.
Another thing that you need to understand is that saving money or paying off bills is a great thing to do but it is much harder without a proper budget. It is because of this that I highly recommend that you have a budget in place before you do anything. Also, if you are serious about taking your finances to the next level, then it is imperative that you have a decent budget. Now, before you start making a budget again it is a good idea to understand all of the reasons as to why your budget might not be working well for you.
[click to read…]