Trying to manage your finances is not an easy thing to learn by yourself. They don’t teach it in school and there are plenty of temptations to separate your hard-earned cash from your wallet. With that in mind, if you start and stick to these money-handling habits, you’ll be in much better money shape than you were before.
Taking the time to transfer money from your checking account to your savings account is something that many people simply never get around to doing. This is why it’s a good idea to set up automatic transfers as soon as your paycheck hits your bank account. By doing it this way, you’ll never even think about it and the savings will add up quickly.
Set Up A Budget
You’d be surprised how many people do not have any idea of how much they spend each month. Take the time to sit down and write down how much you pay each month for housing, utilities, insurance, etc. Then see how much you have leftover. From there, calculate a reasonable amount to spend each week on food. After this is complete, give yourself a modest allowance so that you are able to have some spending money and put the rest in your savings. This may take time to do initially, but it is also a highly-effective way to make sure you are not overspending by the time the end of the month arrives.
Look at Interest Rates
If you have loans from a financial institution, take a look at what you are paying in interest. While you may have a mortgage from only one lender, you may have a student loan from multiple lenders, since you had to reapply for those loans year after year and they also tend to get bought and sold by different lenders over the years. It is beneficial if you look into private student loan consolidation to pay off your student loan debt. This way, you not only get a lower interest rate, but you have only one payment to make each month.
Pay Off Card Debt Each Month
While credit cards are very convenient and many can offer great rewards, they are also the biggest way consumers fall into financial danger. This is not to say, however, that you should avoid using them. It’s just that you should pay them off each month so that you carry a zero-balance. One of the easiest ways to do this is to only use the card for what you can actually afford and pay off the amount each time you use it, even if that means making multiple payments a week. The balance will never get out of control by paying it off this way and you will be able to enjoy the benefits the card may offer, such as airline miles, hotel points, and other reward offers. Also, by paying with your credit card, you usually have automatic protection if something you buy breaks. This saves money on extended warranties or repair costs.