Category Archives: Personal Finance

Five New Years Resolutions For Improving Your Personal Finance

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Our financial lives can always use an overhaul, and what better time than in the new year to refresh what’s become stale and unprofitable?

Rethinking how we manage our finances for a new year is one of those things that is worth our time and exploration. All sorts of good things can come from a personal finance reboot, so to speak.

Review Your Budget

One good way to start to rethink your finances is to take note of how you spend your money.

Learn how to take small financial steps that lead to big gains. Jot down, in a notepad, every penny that you spend on everything from the essentials to entertainment.

Being aware of where your money goes is much like a dieter looking at the scale to assess the weight they are losing. The only difference is that if you make adjustments to your frivolous ways of spending, your money will grow and you have everything to gain from that.

So for the New Year, a strong resolution is: gain money, not weight.

Set Specific Amounts to Save

No matter how dreaded the task may seem, learn to set specific financial goals such as contributing X amount to an emergency fund. This is a practice that pays off in the event of unforeseen expenditures.

Those who start the year setting measurable savings amounts for the coming months tend to repeat this smart practice each year and end up better off financially than those who don’t.

Resolve to set financial goals that are attainable and measurable, so you can protect yourself from financial storms.

Automatically Pay Yourself for Your Future
You can automatically set aside a percentage of your income, and this is a good way to contribute to any savings towards a home or car, retirement, 401(k), or college fund. Make it a habit to pull ten percent of your income out and pay yourself just like you would any bill. With discipline, your financial future may look brighter before you know it. So here’s a resolution: set up an automatic withdrawal from your bank account to an investment account. You will pay yourself automatically, and you probably won’t even notice that the money has left your bank account.

Switch Banks

With the onset of mobile banking and the use of apps, one suggestion is that you switch to a financial institution that provides optimum services and tools for your personal financing. The new year could be a prime time to do so.

If finding a bank that offers online personal financial management (PFM) tools helps you budget wisely and learn how to make your money work better for you, then that could be a New Year’s resolution worth looking into.

Resolve to Make a Resolution

More important than any single financial New Year’s resolution is the commitment to taking charge of your finances. Whatever resolution you make will be better than ignoring your finances altogether.

Once you get in the habit of paying attention to how you use your money, you may find that you actually enjoy managing finances, rather than dreading it. An easy way to get started is to write down three improvements you’d like to see in your finances, such as income, savings, paying bills on time, and so forth. Then think about the specific steps you would have to take to make those things happen.

Before you know it, you’ll be way ahead of the financial game.

At the end of next year, you’ll look back and congratulate yourself for making New Year’s resolutions that are practical and can shape your future.

Four Personal Finance Myths You Should Un-Learn Right Now

2204277278_cbf43f4146_bManaging your personal finances may seem easy enough to do, but many individuals struggle with financial issues and concerns. Everything from creating a balanced budget to finding money to save for retirement can boggle your mind and can create stress in your daily life.

More than that, personal finance myths can add to the complexity of your efforts. The fact is that clarifying some of these myths can help you to improve your personal finance efforts and strategies with great results.

You Can Wait Until Later to Save for Retirement 

You may not plan to retire until you are 60, 65 or even older, but that does not mean that you should delay your retirement efforts.

The fact is that compounded interest, dividend reinvestments and other factors can work in your favor over time. The sooner you start saving, the more effective these will be in working for you.

Tax Breaks Are Only for Rich People 

Many people who are less well-off believe that tax breaks are only for the rich, and because of this, some often fail to look for deductions and credits they may qualify for.

There are actually many rebates and credits that are designed for all economic classes. By learning more about these tax breaks, you can determine which options are available to help you reduce your tax liability each year.

Social Security Will Disappear Before You Retire 

Social Security benefits are often mentioned in the news, and it is widely known that the funds available for Social Security payments are decreasing. This is compounded with rising numbers of people reaching retirement age and applying for their benefits.

The fact is, however, that Social Security will not disappear before most people alive today retire. The benefits may not be as significant for future retirees as they are for today’s seniors, but you can still reasonably expect to receive some benefits.

Your Home is a Ticket to Wealth 

Many believe that the great American dream of home ownership will instantly lead to personal wealth, and this is simply not the case.

A home can provide you with tax deductions, an affordable place to live and other benefits. It may appreciate in value over the years.

However, it also requires maintenance, repairs and even updating over time. Because of this, the costs of home ownership should be compared with the benefits. Many will enjoy selling their home for a profit at some point in the future, but a home should not typically be a person’s soul source of savings or the only retirement plan.

Personal finance can be confusing and complicated. There are numerous factors to consider as you pay your bills, create a budget and make savings and investment decisions. Myths surrounding personal finance can make it more difficult for you to make informed financial decisions and to prepare for the future.

Through the clarification of some of the more common myths that are circulating about personal finance issues, you can easily make better decisions about your finances.

Six Tips For Saving Up For A Big Purchase

Saving MoneyIt takes careful planning and strict discipline to save up to make a purchase on an expensive item such as an appliance, a car, or a home.

Even if you take out a loan for such an item, you’ll probably still need to make a down payment that will require more money than you typically have in your wallet at any given moment.

Simplifying the saving process

Many of us assume that saving up money is always difficult unless you’re earning an enormous salary. However, those who make this assumption fail to factor in small expenses that sabotage their efforts at constantly enjoying a comfortable balance in their savings account.

The following are some simple tips that will help you save up the money for an imposingly priced item that you nevertheless need:

1. Be patient

Don’t let yourself get frustrated by expecting things to happen too quickly. The first step to saving up is realizing that your savings will grow gradually.

You can’t speed up how quickly those paychecks come in, so be realistic concerning how soon you’ll be able to make your purchase.

2. Sell things you don’t need

You might have a lot of unused items lying around your home that you can use to put yourself in a better situation to make a large purchase.

Before you even start saving, you should consider what you might be able to sell. If you have a lot of fairly valuable possessions cluttering up your home, you might be able to finance your entire purchase by selling them.

3. Budget

Laying out a budget will help you figure out how much you can afford to put aside every week. When you set out a detailed budget, you’ll be better able to see where you might be wasting money.

While you should set out as strict a budget as possible, you should still realize that you’ll still need to accept certain expenditures to keep yourself going.

4. Drop bad habits

Most of us spend a great deal of money on bad habits like eating out and smoking.

Consider dropping such habits not only to make saving up easier, but also to improve your health and lifestyle. Simply quitting smoking can save you $100 a week or more.

5. Do some research

Saving money is like anything else: the more effort and time you put into it, the easier it will become. Take some time to look at money-saving offers and special programs that can help you to cut back on spending or purchase items you need at a lower cost.

Don’t only look for ways to save money on your big purchase, but also seek out everyday savings on things like groceries, medications, entertainment, and more.

6. Consider buying used

If you’re contemplating a large purchase, you can probably cut costs in half by buying used.

Seriously consider cheaper ways of making your purchase if you need to buy an expensive item as soon as possible.