You need not be an expert in finance to get your personal finances under control. With a little planning and discipline, you can live on what you make while putting some aside to grow your net worth.
Tip #1: Credit Card Grace Period
Unless you have no other choice, do not accept grace periods from your credit card company. It seems like a great idea, but the problem is you get used to not paying your card. Paying your bills on time has to become a habit, and it’s not a habit you want to get away from.
Tip #2: It’s On Sale! So What
Resist buying something just because it is on sale if what is on sale is not something that you need. Buying something that you do not really need is a waste of money, no matter how much of a discount you are able to get. So, try to resist the temptation of a big sales sign.
Tip #3: Budget: No – Cash Flow Stewardship: Yes!
Budget, budget, budget – no, whatever you do, DON’T use the word budget. Instead, be a good Steward [be responsible and protect] of your Cash Flow. The only way to know what is coming in and what is going out is to keep track of your income and expenses with a ledger. Whether it’s with pen and paper or a computer program, sit down and get it done. Your finances will thank you for it.
Tip #4: Skip the Cash Advance
Never use a credit card for a cash advance. Cash advances carry with them extremely high interest rates and stiff penalties if the money is not paid back on time. Strive to build a savings account and use that instead of a cash advance if a true emergency should arise.
Wealth Principles
The only way to accumulate wealth is to make more money than you spend. People who do this always end up in debt because the money they make has to go into repayment of debts. Take stock of how much money comes into the household, and make sure the amount you spend is less.
Tip #5: Trusts
Trusts are not only intended for people with a lot of wealth. A trust allows you to say where your assets will go in the event of your death. Dealing with this in advance can save a lot of grief, as well as protect your assets from creditors and higher taxation.
Tip #6: Financial Literacy Education
To help ensure a financially successful future, make education a priority. If you have a college degree, you are more likely to earn more than those with a high school diploma. Furthering your financial education can be one of the smartest investments you make.
As has been shown in this article, it is quite possible for someone to live comfortably, increase their wealth and have healthy finances. By being sensible, and using the handy financial advice in this article, you will be able to create a workable cash flow plan, reduce debt, increase your wealth, and finally be in control of your finances and future.
