We talk about financial position of countries, financial position of firms etc. But little do we talk about our very own financial position. Now through this article, we will try and focus on things that are important from the view point of our personal finance. So here is a quick crash course on some most important things about personal finance. It may also work for people without finance background.
1) The first important step is that you need to calculate what is your income per month and what part of it do you spend. You also need to know where you spend (like food, clothing etc.). You can use different budgeting tools for this purpose which are available online. You have to prepare your budget in a practical way, track down your expenses and then follow it so that you don’t spend above it.
2) You have to be responsible in how you use the credit so that you don’t have more debt than you can repay. Credit comes in various forms like credit cards or loans for car, house etc. You have to compare the costs associated with various credit options and then choose the best.
3) You have to reduce your spending and make timely payments against outstanding loans to ensure that you have a good credit health. Consistent payments are very important. You also should verify the accuracy of your credit report on a daily basis.
4) If you face any debt problem, then you can contact a reputable debt relief company which can give you multiple options to get you out of debt. The company should have the necessary the experience, resources, and certified counselors needed to work with you to help pay off debt and turn your financial life around.
5) Time can change and so can your life. In order to survive during tough economic hours without taking huge debts, you have to create your own savings reserves. Start saving! Make it a regular part of your life even if you are able to save only a small amount. You may set up automatic deposits into your savings account from your paycheck.
6) I know we are way too young to think about retirement but believe me when I say you should start planning your retirement so that you live comfortably in future. Explore the various retirement options like pension plans, mutual funds etc. and choose the best. You need to increase your knowledge about these products and for this you should take all the help needed.
7) Buy the right kind of insurance policies for you and your family. Compare different kinds of policies before buying. In addition to life insurance, consider other types of insurance that protect your health and possessions like your home or automobile.
8) Shop at competing prices for everything and never buy anything at full price – Clothes, car maintenance, insurance. If you are ever paying full price for a service, you are being exploited. Explore options and choose the best. Do not hesitate to bargain. It’s your birth right.
9) Minimize your taxes – Learn how to have tax free money. If the richest people can do it, so can you. There are ways. Learn about them as much as possible. (PS-I am talking about saving taxes and not evading them).
10) Take care of yourself – Smoking will raise your life and health premiums. A drink and drive charge will disqualify you from life insurance all together. So you have to be cautious.