When you are in college or on your own for the first time, it is easy to blow money on going out or partying. Instead of doing that, be fiscally responsible and take care of your finances to prevent your debt.
The key to being successful is learning how to manage your money. Capital that you invest should be well protected. Letting profits build up in anticipation of later, larger expenditures is alright, but you must keep in mind that liquid assets cost you in terms of investment opportunities passed up. Set a rule for what profits you keep and what profits go into capital.
Avoid getting into further debt to save your finances. While you may need to get into debt for mortgages or student loans, try to stay away from things like credit cards. The less you borrow, the less you will spend on interest.
You can automatically have a set amount of money moved to your savings account via your checking account as often as you choose. This is a great technique which forces you to put aside a little bit of money each month. In the event you are saving money for something special (e.g. a vacation or wedding) this can be very helpful.
Credit Cards
If you are trying to get the best credit score, you shouldn’t have more than four credit cards. Using one card can take a while to improve your credit, while using over four cards can represent a lack of being able to manage finances effectively. Start by using two credit cards and if your score needs an extra boost, consider adding another.
The two biggest purchases you make are likely to be your home and car. A large portion of your budget will likely be devoted towards interest and payments for these items. You may consider making extra payments to lower the amount of interest that you end up paying.
To be truly financially stable, you should have a good deal of savings. If you do not have much saved up yet, open a savings account and get the ball rolling. Socking away money in advance means you have to rely less on credit when disaster strikes. Contribute what you can every month, even if it is very small.
Stop eating so many fast food meals and restaurant food. Providing a home cooked meal for your family will not only save you money, but will also give you a feeling of accomplishment.
Save a set amount from each check you receive. If you simply plan on saving whatever may be left, you will always spend everything. If you know that the money isn’t available, it will help you create a budget, and will curb the temptation to spend.
Credit Cards
Instead of the debit card, use credit cards. One great use for credit cards is for daily items, such as gasoline or food. Earning rewards can get you cash back for the things you normally purchase.
Looking online can be a good way for one to find coupons that would not have been available through any other form, such as a newspaper or in a store. Taking advantage of opportunities like online coupons is a good habit to have for those wanting to maintain the best personal finances they can.
Getting the advice of family members that have knowledge of financial issues or work in the finance industry might be more comfortable than getting advice from a stranger. If one does not have a person in their circle that fits this description, someone one knows who is smart with their money is the next best choice.
Watch your mail for letters notifying you that the terms of your credit accounts are changing. Current law requires credit issuers to give you at least 45 days notice of any changes. Make sure that you read the new information carefully. Once you have done this, you can decide if the changes make it worth keeping the account. If you decide that they are no longer worth it, pay off the account and close it down.
Avoid getting into debt too far by learning how to properly budget and how to spend your money properly so that you make the most out of your money. Use these tips to avoid any of your accounts going into collections.