It can be tempting when you get your first financial loan experience to go out and spend. But don’t go wild about it! BUT DON’T YOU FORGET, THIS LOAN MONEY IS TO FOR YOUR EVERYDAY EXPENDITURES AND IT HAS TO LAST; and, you will be paying it later!
> Work your budget! – You need to put a stress how important it is to be right on track when it comes o spending, to keep your budget in line.
> Get a savings bank account with an interest – free overdraft. Look around for the best deals and look past the freebies to the amount of interest-free overdraft you can access at your disposal before you need to pay it back.
> Visit websites that can provide handy guides for your money savings work around. Check websites that can provide information and tips in managing your money and living on a budget. Includes web chat and telephone support.
> Join groups/clubs – that can offer discounts in shops, restaurants, grocery and fitness clubs… you may be surprised at how much you can save!
> Part time job or vacation work – Aside from your main source of income, it would be wise to put in additional funds derived from extra income such as a part-time job or “on the side job”.
> Sell excess stuff – organize a garage sale in your neighborhood. Make an inventory of your stuff that is no longer in use. A dollar or two for each item sold should extend some help with your financial needs.
> Phone/cable/internet bill – Shop around for the best deals for your utility bills and your broadband. Few dollars difference can augment your available money in paying or your other needs.
> Open a savings account – make your loan/bursary work for you by earning interest. You could earn over 5% interest on a mini-cash ISA and there are no penalties for transferring money into a current account.
Some more tips – if you get into debt…
> Don’t panic – it can often be resolved through speaking with the company and coming to an agreement. Be honest as to what your current financial status is.
> Don’t ignore it – it will only make things worse. Make sure to do the first move in settling the debt with the lender, they might even suggest other option that could make your life a lot better1
> Do something about it now! Don’t just sit on one corner and blabber about your woes. Crying over it and doing nothing will just add more worries on your part. ACT and RESOLVE, enjoy financial freedom!
Recovering from a personal setback will likely find yourself having to reconsider financial priorities in targeting where to focus effort and resources. Not all household debts will equally impact your family. First payment priorities should be all bills associated with your essential needs, including utilities, food, mortgage or rent, and insurance. While you can most likely find ways to save on all of these bills, by cutting back and negotiating lower rates, paying them is extremely important.
Also, having appropriate health insurance coverage is essential because a medical emergency could put a huge dent in your finances. Check out government offered health coverage or HMO companies that offer lower but practical medical coverages.
Here are some examples on how you can prioritize your financial obligations:
> First priority debts – would include your rent or mortgage, tax liabilities, insurance premiums, auto loans, and utilities.
> Second priority debts – may include other secured loans through financial institutions, such as a car loan.
> Third priority are lenders – this includes retailers, hospitals, doctors, credit card issuers and other unsecured creditors.
Remember, each person will have his or her own unique list of priorities. Realize that just because a category of debt is listed as a third priority, does not mean it isn’t important. It simply means you need to contact and make payments to the higher priority creditors first. For help determining your financial priorities.
Set your priorities – create your financial priorities worksheet, evaluate if these are “needs or wants”, then rank your payment priorities.
Priority – make a list of all your debts; rank and figure out when, and how will pay your debts.
On your spreadsheet, create the following tabs, and make notes on how will you resolve or attain your goals:
Paying off unsecured debt
Paying all secured debt on time
Saving for a down payment on a home
Buying a car
Taking a vacation-Having money for entertainment
Starting/maintaining a savings account
Setting SMART financial goals
Before you think about setting goals, review the five parts of SMART goals.
S A smart goal is specific. It pinpoints something you want to change to achieve.
M A smart goal is measurable. You can measure or count a SMART goal.
A A smart goal is achievable. Setting goals too high can lead to frustration.
R A smart goal is rewarding. Reaching the goal should be a reward for your hard work.
T A smart goal is trackable. Set milestones and schedules for your goals.
After you decide what your priorities are, review your budget and determine which bills you are unable to fully pay. Then, contact your creditors to discuss your situation. Explain that you want to pay your bills but due to your setback, are unable to. In some situations, you may be able to get a new payment plan.
If you are bound to resolving all your financial woes, you need to have a mindset that says “I will be free from debt now”. Yes, it could be easier said than done, but with sheer determination, nothing can’t be achieved. Let me help you with few steps to finally resolving your financial woes!
The first and most important step in developing and following a financial plan is to examine your attitudes about money. Ask yourself the following:
- Are you ready to accept responsibility for changing your financial situation?
- Do you believe that you can and will change the way you make financial decisions?
- Can you identify at least one benefit you hope to gain by changing your money management behavior?
If you positively respond to these questions, then you are ready for and able to start your path to financial wellness.
Assess your financial situation
Start your journey with a self-assessment designed to motivate you. Completing this simple quiz can help you assess your current financial situation.
Clearing out financial mess
Getting yourself financially organized is a great way towards financial wellness. But before you clean up, you should also know that some things are worth holding on to. Note on the following to keep:
– Grocery receipts and other nondeductible expense receipts and statements can be destroyed after they have been recorded for budgeting purposes.
– Paycheck stubs should be checked against your W-2. If it’s a match, you can toss them.
– Canceled checks should generally be saved for three years. Keep those related to your taxes and business expenses permanently.
– Utility bill stubs may be destroyed after recording, however, you may wish to hold onto these for a year to compare monthly costs.
– Household documents pertaining to buying, selling or improving your home should be kept as long as you own the home.
– Receipts from major purchases should be kept as long as you have the item.
– Credit card receipts can be destroyed once you have reconciled with your monthly statement. Additionally, credit card monthly statements can be destroyed on an annual basis.
– Individual tax return documents should be kept for seven years, according to the Internal Revenue Service (IRS). The IRS has three years from your filing date to audit your return if it suspects good faith errors. However, the IRS has six years to challenge your return if it thinks you underreported your gross income by 25 percent or more.
Finally, before taking out the trash, be sure that all identifying information has been destroyed to avoid your personal information falling into the wrong hands.
Approaching “adulthood” can be rough, especially when it comes to finances.
Budgeting your first salary to pay your bill and other expenses can be tough, especially if you are also covering to pay your student loan.
It may be tough to start but it is better to learn the ropes of proper money handling at a young age. It’s common for young adults to be burdened with debt, and while not all debt is necessarily bad, it’s important to prioritize repayments. Better to pay down your debts with high-interest rates first. Loans that carry interest rates above 7% can be a major financial drain over the long run. Credit cards are often the culprit. Do nothing until that is paid off. Personal finance experts tend to stress the importance of having an emergency fund to cover unanticipated expenses to avoid long-term financial damage. If you are not set up to tap cash for something, it can derail you financially if you put it on credit card. The original expense can bloom because of interest.
Once high-interest debt is history, start stashing away money for emergencies. You can start by saving a 3-month cushion for unexpected expenses or emergency cash. Having a stash of cash gives you more freedom and control over your life, whether it’s leaving a bad job, starting a new career or exploring a new hobby or business idea.
You may also want to figure out what you really want with your finances. Create concrete goals can make a financial plan more realistic and successful. Setting goals that are “time-lined”. This will allow you to tailor your budget and set specific savings and spending targets.
You also need to be time conscious. So the earlier you get started, the better. First, the money comes out of your paycheck before taxes and also grows tax-free, so you won’t owe any taxes until you withdraw it.
Many of us leave the bulk of our assets in cash, which means they aren’t earning much from it. Explore the possibilities of “investment”. Some of us can be more hesitant when it comes to investing. But we have to know that fear can mean missing out on opportunities to grow and create wealth. Keeping a diversified portfolio with broad market exposure can help alleviate investing jitters. To get started, try to invest 1% of your paycheck and increasing the amount regularly. Investment can mean: “Pay yourself first”. Do it every paycheck, and you will never notice how far has your initial investment have grown.
I was thinking it would be a great time to take a look at comparing the amount you owe as well as how to create a healthy debt repayment arrangement. Obviously, this only works if you commit to spending less than what you earn. If you’re spending more than what you earn, this will cause pile up of debt – which eventually lead to a more serious financial problem.
To get you started, you need to write few items. Doing some tasks by hand adds personal touch and commitment and importance in what you want to do. You will also need to have all the latest statements of what you owe, from bills, credit card, and consumer loans. Analyze the interest rate on each.
You must make a chart with four columns consisting of each debt, amount you still owe, monthly payment, and the current interest rate on each debt. Make sure to get all the information from all the statements. The goal here is to have all your info in one spreadsheet.
Once you have the list and check which of the debts to be prioritized. Go through that list and number the debts based on their interest rate. Give the highest interest a big number 1 off to the left, the next highest a big 2, and so on. Don’t worry about which debt has the biggest balance – that doesn’t actually matter when figuring out which debt is the most important one to pay off.
Once you’re done with the order of debts in place, go to the debt marked with numbers. If it’s a credit card debt, call the credit card company and ask for a rate reduction, or transfer the balance to another card for a lower rate. You can also pay it off with a home equity line of credit or with a personal loan from your credit union. Consolidate your loans at a very low rate. The key is to lower that interest rate. Go through every one of your debts from highest to lowest interest rate and do your best to get each rate nice and low. Obviously, there are some rates you’re likely to be unable to easily change, like your mortgage rate, but see what you can do about most of the rest of them.
Over time, you should be eating away quickly at that top debt, and you’ll be able to eliminate it. Cross it off the list, then start hammering away at the new top dog on your list.
Whenever a debt adjusts in interest rate, cross it off the list, then add it back in just like a new debt where it belongs based on the new interest rate.
After you do this a few times, it’s useful to rewrite the list so that everything remains clear on it, but it’s fun to hold onto the old one (with some crossed-out debts) to remember where you came from.
If you are tired of lengthy family budgeting and want a quick fix in saving some funds, start on your basic needs – grocery. Your food budget is probably the highest budget-eater. On average, consumers spend more than 13 percent of their income on food. Fortunately, food bill is one of the most easily manipulated, and saving money is virtually effortless.
First, everyone’s heard that you should not shop when you’re hungry is a good idea. And you know the reason too well, right?
Here are some practical shopping ideas to keep in mind:
> Always shop with a list. On average, impulse buying accounts for 20 to 50 percent of a total grocery bill. Instead of wandering aimlessly through the aisles, bring a shopping list and a pen with you.
> Grocery stores are for groceries. Books, batteries, light bulbs and pet supplies can all be found at the grocery store. Before you purchase everything you need from one store, make sure you aren’t paying too much.
> Shop alone. Marketers spend a lot of money convincing kids to buy their cereal for a reason. By reducing your distractions, you can make thoughtful purchase decisions.
> Carefully consider the cost of convenience. As a general rule, the more convenient the item, the more it will cost. Ask yourself if it is really worth paying more for shredded cheese when shredding it yourself would take mere minutes and save you some cash.
> Shop only once per week. Try to adjust your schedule and your purchases so that you are going to the grocery store once a week. This will help reduce impulse shopping and should be a big cost saver. If you must go more than once per week, stick to your list.
> Plan your route. To find the most natural and least expensive ingredients, such as dairy, bread, vegetables, and fruit, try skipping the center of the store and make a loop of the outermost aisles.
> Consider generics. Look for generic brands of items where it really doesn’t make a difference. For example, most dry goods have the same ingredients, regardless of the brand. The difference in price, however, can be as much as a 50 percent discount.
> Use coupons wisely. Only use coupons for items you are planning to buy anyway. Also, make sure you compare the price of a product with the discount on the coupon to the regular price of the brand you normally buy.
Finally, don’t assume that all supermarkets have the same prices. Make a list of the ten or so products you buy the most and do some comparison shopping. Often you will find a huge difference between chains, and if you can save just 5 percent it will add up to hundreds of dollars in the long run.