You’ll frequently hear others give you unsolicited advice about managing your own personal finances. Some bits of advice might be worth listening to, but let’s face it: most of that information is generic and not that helpful. You should not rely too much on such unsolicited advice, since much of it may not really be very accurate or useful.
Still the question stands: What should you be doing to better manage your finances, and how can you avoid spending money on everything?
Here’s the issue: Many people, including yourself, do not grasp how important planning future savings is. It is common for those that do save, to use their salary as it comes and if something is left at the end of the month, then save that amount. Even though this is not as bad as unable to save at all, still this is not the way it should be done.
Manage Your Finances The Right Way
When it comes to saving money, let’s take a look at a few tips that should help out with your goals. These methods have been practiced by many successful individuals, and they have had surprisingly good results.
Save 20% Of Your Earnings
Save money out of your paycheck before you do anything else instead of saving what is left after you’ve spent everything else. Regardless of how much you are paid, one-fifth of it should be saved for a later date. You can keep it as cash in a safe place or deposit it into an account. When you do this you’ll always have some extra money after you spend your hard earned money on the bills, groceries or something new you need.
This is a great starting point for those who are looking to save money and even protects your from rainy days in the future. Won’t it ease your mind to know that you have some emergency money just in case you have an emergency?
Stick With The Basics
The new iPhone or iPad just came out and looks cool! Your office mates may have the latest iPhone, but you bought an iPhone 5S not so long ago. While all of these new phones are quite tempting, you should not buy any unless you are really in need. Before you buy, ask yourself if you can live without it.
Does the new model have features that the one you have now does not? Surely, there isnít anything wrong with treating yourself with occasional luxuries, still limit it to a minimum. The time to spend money on extras is when you have cash leftover after you’ve saved 20% of your earnings.
Use Cash Instead of Credit
The credit card were not meant to sit on our wallets, they were meant to be used, right? They are so easy to take out and swipe for any type of purchase you can imagine. You have an entire month to pay off that latest trinket you bought, don’t you? But when you get used to this mentality, those $50 and even $10 bills accumulate very fast putting you into severe debt before long.
Always pay cash whenever you can. You only want to use credit cards when they are required. Replacing it with a debit card is even much better.
You can take control of your personal financial situation right now. It’s all a matter of replacing your old negative habits with positive new ones.