If you are like most people, you are not sure about making financial decisions yet. You sometimes think of hiring a financial expert but that move seems to be expensive. You try hard to understand the concept of saving, but after paying for basics such as rent, utility, gas and college loan, there is hardly anything left to save. And you wonder if managing finance as other people talk about is a cruel joke when it comes to your life.
1. Dealing With Debt
The good news is that if you can start paying attention to your debt today, you will have solved most of your problems because, for most people, debt is what ruins their financial health in the long run. So, if you have any savings left, use it to pay off your debt that has a high-interest rate like credit cards or loans from credit unions. If possible, transfer high rate loan to a low rate loan or consolidate all your loans into one loan. Pay your bills on time from now on. Remember that you can’t change the past, but you can make a huge positive difference in the future.
2. Don’t Rent Or Lease A Car
It is easy to see why some car dealers push leasing to their potential customers instead of buying because that is where they do most of their profit. You may find the new car models, loan terms and flashy perks enticing. But remember, it is in your financial interest to deny their offers and listen to your intuition.
Additionally, leasing a car can be so bad that you may end up with more loans and a huge dent in your financial portfolio. For example, when you lease a car for a period of say five years after the lease is up, you are left with the option of buying that car. It only makes sense for those who like to drive new cars every now and then. It is particularly bad for those who are not in good financial shape and are bad with vehicle upkeep.
3. Take Stock of Your Asset
So, you have started your journey of realizing one or two specific goals in life. Now it is time to create a road map to reach those goals. The first thing to do is to count your assets. If you have been saving for a while now, take a look at how much money you have, any real estate in your name, an inheritance that others bestowed upon you and assets that are going to be by your side in the near future. Decide where you are now financially, and where you want to be five, ten or twenty years down the road. Automate savings whenever possible and be consistent with your plan.
4. Invest In And Out
One of the safest ways to save for your future is to keep your money in a checking or savings account. We all know that investing in the stock market can be a bad move given its volatility and uncertainty. However, you can take your savings and put into investments known as funds instead or betting it all on some random stocks.
Funds are a huge collection of different stocks, bonds or other money market instruments, and they can significantly reduce your exposure to investment risks. Your success or failure in funds depends on the collective performance of various instruments, so if one or two stocks in the fund lose value, you won’t be losing all of your money.
5. Plan For the Worst
Be prepared for the worst-case scenario. As much as you want to make money and save it, protecting your assets is equally important. Having insurance for things that you want to safeguard, such as life, health, property, income protection, business and vehicles will save you and your family from financial loss due to illness, natural disaster, economy and accident.
So, get into the details of various coverage insurance policies offer by getting quotes from insurance companies. Compare car insurance, term life insurance, home insurance or health insurance one by one and select the best that suits your needs and budget. Pay attention to deductibles, amount of coverage and your individual situation.
6. Do Your Best
If saving money is in the cards right now, you should also focus on not spending money as well. Whenever you are compelled to purchase something other than basic necessities, make sure you make a smart move. If you are buying a home or renting, negotiate as much as possible. A lot of people feel hesitated about doing this, but if you want to reach your goals early, force yourself into negotiating. Ask in a polite way, get everything in writing and only sign the documents if your budget allows.
