When it comes to tips, everyone is interested, whether it be health tips or stock trading tips. Everyone wants an easy and prepared recipe to cook food. Financial education is the most neglected topic among people. But believe me, learning to manage your money can give you immense satisfaction and a foundation for a fulfilled life.
There is no such common practice in financial education. It’s just knowing where to invest your money, from where to borrow, how to save and how much to save, and much more. It is not a one-time application but a regular habit everyone should inculcate to have a positive relationship with money. Here we came along with 10 financial tips to make money your life savior.
1: Organize A Financial Calendar –
“For every minute spent in organizing, an hour is earned”
If you frequently forget to pay your dues, premiums, and tax payments then you should spend more time in maintaining a calendar and to-do list for your financial activities. It reminds you periodically about your incomplete payments and helps you to save penalties and interests. That will improve and maintain your credit score.
2: Focus on Interest Rates-
You focus on interest rates and you will get answers to all questions such as which debt to pay first. The answer is debt with a high-interest rate. Which investment policy is best? The answer would be the policy that gives you a high rate of return. Many questions arise and the answer would be the interest rate.
When it comes to budgeting nobody wants to do or they just escape from the number of actual expenses they incur.
3: Work on Budget–
“ Do not save what is left after SPENDING,
But spend what is left after SAVING.”
– Warren Buffett
Budgeting helps you to keep a check on your expenses and make sure that your savings are on track or not, whether it be weekly, monthly, quarterly, or yearly. A person should save at least 20% of their income.
4: Set Definite Financial Goals-
Be clear and specific with your goals. It’s not the words, but the use of numbers and dates to describe what you want to accomplish with your money is essential. It helps you to analyze the ratio of your savings and source of income.
5: Adopt Spending Psychology-
It is crucial to know where and how much to spend your money. You can track your spending habits through excel sheets and banking apps. It can help you cut down the insignificant costs and save extra for your crucial ones.
6: Set Short-term Money Goals-
It is rightly said that if your goals are away then there are fewer chances of them being fulfilled. So rather than focusing on big goals, set short-term and small goals that will bear fruits quickly.
For example- saving money to buy a new house.
7: Choose Federal Loans Over Private Loans-
Federal loans have flexible terms and conditions of repayment and better interest rates. One should go for federal loans instead of private loans if there is no certainty in your business. For example – you can opt for Revenue-based Financing, under which companies provide funds in return for a certain share of your business revenue. They are useful for short-term capital requirements.
8: Start Saving Now-
How many times have you heard this?? ‘I will start saving money next month.’
Let’s not delay in planning our future. You should start saving for your retirement plan as early as possible. There is a popular rule of thumb i.e. the rule of 70 percent which states that you will require 70 percent of your income to maintain the lifestyle you want in retirement.
9: Get Insurance Done-
Insurance is a way to prevent financial loss. An insurance company covers the financial loss on your behalf in exchange for an annual or monthly premium. There are a few insurances you need to take- life insurance, health insurance, income protection insurance, vehicle insurance, and home insurance.
10: Pay Your Credit Card Debt-
Credit cards allow you to buy things now and pay for them later. This sounds interesting but for the long-term view, you are paying much higher prices (in the form of a high interest rate) than saving it for later.
It is advised to make it a priority to pay all your credit card debt as soon as possible.
With these 10 simple financial tips, you can manage your credit score as well as financial terms. For more financial support and guidance, connect to experts at Vedfin