10 Personal Finance Tips
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Each one of us wants to save money and make sure we can hold on to some. More often than not, Americans are not too good with this. Read the 10 tips for persona
It is a known fact that US amongst the world has the lowest savings rate. Not just that, American households also carry the biggest debts, especially that on credit card.
The below mentioned 10 rules will help to intend personal finance management.
1. A lot of times you may feel you that you earn just to pay your bills. So make sure you put away atleast ten percent of your savings away. You have an option to do this with the 401 (k) employer-sponsored or a retirement account or an account where passbook saving could be done.
2. Make sure the money saved for emergencies is worth the income for 3 to 6 months. Use this saved money only for emergencies. Uncertainty is the key of life, so you may have a family or medical emergency, you may get sick or become disabled, lose your job. Please note vacations and a new wardrobe are not emergencies.
3. Feel free to consult the Human Resource Department at your office for an in-depth detail of how the 401(k) employer-sponsored plan works. Take advantage of this and make sure you contribute a minimum of three and ten percent, as the employer would match on the same.
4. Credit cards that have the highest interest rates must be paid off at first. If you have two cards with 12 and 15 percent interest rates. Make a minimum payment on the 12, till you have paid off the one with 15.
5. Making a budget is a must, but also sticking to it is necessary. Use a computer or the old way of paper and a pen, just figure out the expenses and your income at once. The left over money is yours to spend in your own way.
6. Maintaining a spending journal is a good way to keep a tab on where the money goes, especially cash. Keeping a tab of your expenses for about two weeks will help in a rough idea on how to plan your budget.
7. Have a separate account where you save money for your present needs. Make sure you don't break the savings from your retirement plan account. Keep in mind that money is for after retirement. If you do so, the penalty for early withdrawal and tax implications are so heavy that you would be losing too much for a short-time cash infusion.
8. It feels good when you pay by cash, use cash as often as possible.
9. If you shop smart that is around the best banking programs and credit card deals you can save a hundred dollars in a year. Shaving off some percentage points on the credit card and avoiding bank fee can help.
10. There are people who are better off than you and people who are worse than you. Keep away from peer pressure. If your friend is buying some extravagant stuff doesn't mean you too can. Care about your finances and don't have a competition to keep in level with Joneses.
