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What is personal finance? It is money that you control. Times are tough these but they are getting better as more and more people are returning to work and earning a living once again. In fact, the unemployment rate is only 7.7% according to Google’s public database. Today, more people are employed than at any other time in the history of the United States.
What does that mean for you? Well, if you’re looking for work chances are you’ll find a job pretty fast if you apply yourself. Once you’re employed, you should begin saving for your retirement and in case you get laid off. As a financial security rule, you should always have at least three months’ worth of salary in a savings account. You need to have at least that much because if you become unemployed, you won’t be at the mercy of others or worse yet, the welfare system.
Take control of your life by saving more money. It is better to have money than it is not to. When you’re broke you are at the mercy of others and that’s not a good feeling. You should also save money for your children’s college education so they get a head start over everyone else.
We are constantly being provided with bad news that the market is down, inflation is rising, insurance costs are rising to high levels, and Social Security might not be around by the time you reach retirement age. Managing your personal finances is an on-going process that never ends until the day you die.
Luckily for most of us, we have more control over our personal financial situation which is a power that is both good and bad. Only you can control your saving and spending habits. You can learn how to manage your assets online as there are thousands of websites dedicated to personal finance.
If you feel your debt is out of control because you owe thousands of dollars on credit cards, you can change that over time. It’s not going to happen next month, but if you apply yourself, you shouldn’t have any problems getting back on track and achieving your financial independence goals.
Here are a few tips to help you save money, and get the most out of your present income. If you are in really bad shape, you should consider getting help from a professional personal finance accountant.
You present income aside, it’s not what you earn on a weekly basis, it is what you save on a consistent basis. Get in the habit of setting aside at least 10% of your income every week. The important thing is to spend a lot less than what you earn. In other words, try to live within your means until your finances improve.
In order to establish a nice sized bank account, you have to control your spending every chance you get. For example, you can purchase generic products and you can save money by clipping coupons. You can also save money on most of your purchases if you shop online. Create a spreadsheet in Excel and keep track of every penny you spend so you have a better idea of where your money is going.
You may have to switch banks so you can get a higher interest rate. It may not sound like a lot right away, but it adds up over time. Remember that you’re not trying to fix your personal finances overnight, instead you’re going to take a long-term approach so a few percentage points in your interest payments can really add up over 5, 10, 15 or even 20 years.
Only use credit cards that offer 0% financing. Try to pay each credit card bill in full every month and begin using cash to make purchases. Once you get out of the habit of whipping out your card at a cash register, you’ll notice a significant difference in the amount of money you spend on a monthly basis.
Purchase a home instead of renting. You may be thinking, “I can’t afford a home”, and you’d be wrong. There are plenty of government programs that can put you in a home for as much money as you’re currently paying on rent. Moreover, your home is an investment that will pay you handsomely if you ever decide to sell. You can also use a reverse mortgage when you reach retirement age so you have an extra $500 to $1000 coming in every month for free.
Finally, begin investing. Learn how to invest and begin small. Don’t drop $1000 on the first investment. Instead invest a few hundred dollars to see what happens. Once you begin noticing returns, you can reinvest the profits so you’ll literally be getting free money. Remember, only you can control your personal finances. Don’t depend on any one else to help you.