Personal Finance Basics by the Book

by Justin Weinger on September 18, 2012

Should you find that your current financial situation is just not getting it that means you need to make some changes in your lifestyle and begin handling your finances more intelligently. In this article, we will provide you with useful info to help manage your finances smarter.

First off, it is highly recommended that you put no less than one quarter of your income into a savings account. These funds should only be used for emergencies like medical costs or insurance policy deductibles. When you get to the point where you have a couple of thousand in this account, it is time to begin to think about investing it. If you are not well-versed in such matters, seek the assistance of a financial adviser. Perhaps consider putting money into an IRA or maybe even real estate and bonds and stocks. Seek out investments that are stable and will pay you through the years. Even if you have a financial adviser, make sure that you personally keep track of your investments as well.

Map out your expenses ahead of time and always keep track of every penny you spend. Have an accurate estimate of your bills each month and place limits on what you will put aside for things like food, entertainment and miscellaneous expenses. Write it down; that’s right, keep a running journal of your finances on a daily basis and at the end of the month tally them up. This will ensure that you pinpoint what it is that may be costing you more than you can reasonably afford. Don’t be surprised to find that those little daily things are cumulatively costing you a fortune.

Things you may want to target are your driving habits, consumption of energy and other little luxuries. Household wise, make sure you use energy efficient bulbs and make a conscious effort to shut off appliances and lights when they are not needed. If possible, consider a more cost-effective way of getting to work, like car pooling, public transportation or even a bike. When you’re out shopping, always be on the lookout for brands that are the most affordable and keep an eye on all sales. Before purchasing anything, ask yourself “do I want it or need it?” Try to discover more inexpensive ways to have a great time, whether with friends, family or even by yourself.

Always compare prices when you’re out shopping. Sometimes when you are finished doing so, you find you didn’t really need the item in the first place. You should especially do so when it comes to insurance policies and things that you have subscriptions to. For example, even if you are currently subscribed to a certain service, be on the lookout for less costly options. Also, if possible, always have your subscriptions bundled together. Not only is this a great way to save on your home entertainment bills, but also your insurance premiums. Also, ditch and features and services you don’t actually need or use. And if you find your car is costing you an arm and a leg, perhaps it is time to consider a more affordable model.

 

Practice these money saving tips on a daily basis. Remember, the main thing in managing your budget is to always go over each expense with a fine-toothed comb and seek out more affordable alternatives.

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