Posted by Art Of Legend India [dot] Com On 4:44 AM
Summary: better ways to organise your personal finances.
Most people think that they have to hire an accountant or similar to keep their personal finances in order. This is true, if you run your own business, but everybody should regularly work on their own personal finances to keep them in order.
Below are some tips you can use on a regular basis which should help you in the long run keep on top of your expenditure and hopefully save you money in the long run.
From an early age, we are usually taught to save money. This is usually so that we can buy ourselves something nice in the future.
Investments are the same as savings where they should build up regularly so you have monetary assets in the future. Try and put a little away each month, no matter how small the amount. The amount is really unimportant, as the point of the exercise is to get you into the habit of saving regularly.
If you have any debts, then it is a good idea to pay these off with your savings, as the interest on most debts is usually higher than the interest you gain on most saving accounts.
When you have enough savings, you can start to think about putting this money into investments. The whole point of this is to make your money work harder for you. The type of investment you use can be a complicated affair, therefore it is a good idea to seek some financial advice on the different types of investments you can put your money into. Some people invest in shares, property, gold, wine and anything else you can think of which may go up in value over time.
Bad debt usually starts with loans which cannot be paid back in time or not at all.
With any loan, the golden rule is to try and plan ahead and make sure you can meet the regular payments until the loan is completely paid off. But in the real world, many things can happen in the future which make it hard for you to meet regular payments, such as losing your job, needing to spend the money on other things, etc.
If you have debts clocking up on credit cards, then you may want to try and put the debt onto another credit card with 0% interest. This can work, but you need to keep a close eye on the amount and make sure that you only use your credit card for essential items.
It is also an idea to only use credit cards for purchases. Try not to use a credit card to withdrawing cash.
Loans are a necessity of life. The important thing is to plan ahead and make sure you can meet the regular payments and pay off a loan in the agreed timeframe. If you don't, your credit score can go down and you can potentially spiral into debt from the interest charges.
Firstly, make sure that the loan is for something you really need or really want. A good way to look at if you need a loan or not, is to decide if the thing you are going to spend the loan money on is a necessity or a luxury. Do you really need it? If you are taking out a loan for a second holiday, then possibly you could do without this.
There are different types of loans for different circumstances. Make sure you check the interest rates, the payback period and if there are any extra charges if you miss a payment cannot pay the loan back in time.
If you need money fast, some people opt for a payday loan or similar. These should only be taken out if you need money in a 30 day period and you are confident you can pay the money back in time. If not, look for the money elsewhere as payday loan interest rates are extremely high.
You really need to start somewhere, so you have to do note down all your incoming and outgoing expenditures. Use a spreadsheet and list every little thing you spend on regularly.
If you can, try and make this task a little game, where it is your aim to reduce the numbers of your outgoings and increase the numbers of your incoming money. If you do this regularly it will just become part of your routine and something new look forward to.
Keeping on track of your finances is something you need to do often regularly. If you leave your personal finances to their own devices, sooner or later you'll get into debt and it is all too easy to be shocked by how much you have spent.
Many of us can save a lot of money by just simply cutting back on luxury goods and things we can buy a lot cheaper. Keep on top of your personal finances and before long you should have money to spare to spend on the nice things in life.
Peter Sutton has worked as an adviser for people wanting a secured loan who have bad credit. if you want some additional tips on personal finance, you may want to try bakerfinancial.co.uk.