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Monthly Archives: June 2017

Financial Aspect Tips for You and Your Partner

1. Understand the way that you both look at money.

If you and your spouse have different beliefs when it comes to money matters, sit down and discuss it. The key here is to be able to compromise. For some people, money is a security measure that needs to be saved. Other people spend it luxuriously and look at spending money as a means to reward themselves for their work. Still, other people are very thrifty that they hardly ever spend a cent of what they have earned.

Understand that the way that you both treat and spend money stems from how you were brought up by your parents. Think of everything that you need to discuss when it comes to your household budget. If possible, set rules on how you will spend your combined income on utility bills, food, mortgage, car maintenance, etc.

2. Set future financial goals.

If you are newly weds and you are planning to have a baby soon, consider this when organizing your finances. If you are a couple nearing the age of retirement, you can make plans on where you will spend your leisure years. Setting long-term and short-term goals will help you finalize your financial plans.

3. Share your money-saving skills with your partner.

If you have different family backgrounds, then you would have something to contribute towards organizing your joints assets. Make each other aware of your personal finances then think of ways on how you can further boost your money-handling tactics.

 

Ways to Avoid Getting Into Debt

Save For Your Luxuries – Don’t Borrow

The first step in avoiding debt is to simply not borrow money. If you want something that you can’t afford to pay for with cash, you probably don’t need it. If you really want it, you should save up your money and buy it. By doing this you will become disciplined and stay out of debt at the same time. It is easy to get a credit card or a loan to buy something. It takes discipline and hard work to save up enough money to buy it. Saving money has always been a simple path to building wealth. The more money you save, the wealthier you’ll become.

Do You Really Need The Latest Tech Goods?

Many people are distracted by the bells and whistles of the many electronic products which flood the market today. Many people fail to realize that the digital camera or Ipod you pay $200 for today won’t be worth anything tomorrow. Electronics almost always depreciate in value. Why go out and use a credit card to buy expensive electronics when they will lose their value after they’re purchased?

Cut Out The Middle Man

One way to effectively mangage your money is to develop a wholesale mentality. When I say this I mean that you should consider not paying retail prices for electronics, furniture, or other goods. You should think about paying wholesale prices for these goods rather than retail, especially if they depreciate in value. Instead of going to the mall or furniture store to shop for clothes or furniture, why not go to a clothing outlet or thrift store?

The Freedom Of Being Debt Free

Many people become wealthy and debt free by simply saving their money, paying wholesale prices for goods, and placing some of their savings in safe investments like IRA accounts. They often will only have one credit card if any, and the amount of money they have saved up will be much larger than the balance they owe on their credit card. This is the real secret to wealth. The get rich quick schemes and late night infomercials are disinformation which will not give you true answers.

Don’t Be Another Sheep!

Avoiding debt and maintaining good credit is another key of financial success. It is important to understand the 80/20 principle when dealing with personal finance. You will want to avoid doing what 80% of the population does. Most people owe tens of thousands of dollars on credit cards, student loans, or car loans. Others use payday loans between paychecks to make ends meet. This puts them in a cycle of debt which will keep them from ever becoming wealthy or retiring in comfort. The credit card companies and banks continue to make billions while most consumers are getting further into debt.

Budget Money Tips

The Greatest Incentive

To encourage yourself to budget money is important, as without the motivation, you will probably not budget that well. What incentive can there be to having a home budget and sticking to it? The answer is actually quite simple. Nobody becomes rich by spending more, or even the same, each month than they receive. Wealth grows from surplus; that is, the surplus left over at the end of the month after you have completed your spending.

Recognizing this can provide you with a kick start in wanting to learn how to budget money, and then put that learning into practice. Once you start to see those surpluses build, your confidence in wealth building, and incentive in budgeting, will grow.

Keeping Detached

It is important when budgeting to maintain a detached view of the figures. Think of yourself as a finance professional helping a consumer set and manage a home budget, and set yourself aside from any emotions that may seep out during a review of your budget. Some parts of the budget can arouse emotions, and thus distort sensible decisions. Things like cutting out a family holiday or weekend trips, that new bike for your son or designer outfit for your daughter, can be emotional sparks. It is important not to allow those sparks to set light to your well drafted budget.

Be Open

If you have a family, the household budget affects those closest to you. The budget is a family affair, and it does help to talk openly about it with your spouse and children who are old enough to understand. Children may not like sacrifices, but they will understand eventually. It can be an important part of their education if you involve them. If you can give them some incentive, too, such as building their own savings scheme into the budget, then they may even start to enjoy it and truly see the benefits.

Ignore Peer Pressures

Your personal budget is simply that, personal. It is therefore something you should see in the context of your own circumstances, not somebody else’s.

To budget your money effectively you really need to be able to ignore peer pressures that may force you into unnecessary or unwise spending. Just because your neighbour or best friend is having two foreign holidays this year does not mean you need to also. Just because your brother or other relative has a new home cinema system does not mean it is essential for you too.

If you can let peer pressure run off you, like water off a duck’s back, then you have made a big breakthrough in learning how to budget money.

 

Helpful Tips to Keep You on Track with Your Budget

1. Determine why you made a budget. There is a reason you have put time into developing your budget, now you need to put into writing what your goals are. Do you want to be debt free, live on one income, or save for retirement? Make this into your personal or family financial mission statement. Write it down or type it up nicely and then have it laminated and display it in a prominent place where you can see it often. Many times we just need a reminder to ourselves for why we are doing a particular thing, and that can be just enough incentive when things get tough.

2. Set small range goals so you can see progress. It can be very difficult to keep up the discipline necessary to stay on budget if you can’t see any measurable progress. Develop some short term goals that you can celebrate meeting. If your goal has been to reduce your grocery spending by $100 per month, then your weekly goal would be to cut grocery costs by $25. Likewise, if your goal is to pay off debt, make a chart to show how much you’ve paid off. Reward charts just aren’t for children! Use a type of chart where you can color in a bar to show your progress, and then color it in every time you make a payment so you can see the progress you are making. Put it up on your refrigerator or bathroom mirror as a reminder that your hard work is paying off!

3. Identify your weak spots and develop a plan to battle them. In sticking to your budget, you need a clear idea of where you may be tempted to break the budget. If you are prone to impulse spending, then you must remove that temptation from yourself. If you go window shopping, leave your credit cards and check book at home! Especially in the early days of sticking to your budget, it is important to re-train yourself to curb spending.

Making a budget is really the easy part in financial management. It is sticking to the budget and making your spending match your plan that is the difficult process. By disciplining yourself and retraining your spending habits, you can achieve your budget goals.