There are some simple things that you have to know how to do in order to have success in our lives. But it seems like no one ever sits down and teaches you some of them such as financial management. In this article, we look at some of the most important things about our finances that we need know like the back of our hand. Please CLICK HERE to watch on You Tube.
Balancing your income and expenditure, making wise financial decisions and handling debt are vital to your financial health. But these are things we don’t learn in school. Once we begin working and earning an income, we start to make our financial mistakes and learn from them. But today, the mistakes are costlier than ever. With mobile phone loans targeting even college students and debt problems affecting millions of consumers, every person should take the time to make sure that they and their children know how to manage their finances.
But why should you bother? Won’t your increasing salary solve all your financial challenges? No, it won’t!
Have you ever stressed about money? I will not say that proper management will eliminate money stress, but it will certainly cut it back by over 90%. If you’ve ever spent hours fretting over where you will get the money to pay for bills or by petrol for your car or whatever, you will truly appreciate the freedom proper financial management brings.
And the thing is, it is so simple. The first things you should know are how to balance your income and expenditure. That means having a written budget against which you record actual spending. Without a budget, and a record of your expenses, you will not be in a position to allocate money to the things you truly want and you will not know where your money went. This often results in working for years, earning a substantial amount of money over those years, yet ending up with nothing to show for it. You need to know how to calculate and compare interest rates of the various sources of credit in order to make informed borrowing decisions. You need to understand what constitutes a good loan and what a bad loan is so that you can avoid the latter. You should know the easiest way to pay off loans and save for retirement and other goals. Being ignorant about debt management can bring about a lot of painful financial drama in to your life. Set financial goals that are appropriate for your circumstances. If it is a car you want, determine whether you can afford a new car and do research before you buy it or take out a car loan. Too many people remain in financial bondage and end up poor yet are driving fancy cars. Please CLICK HERE to watch on You Tube.
After you’ve done a little homework, you can start understanding your own finances. Start with your bills. You need to not only know how to read them and pay them, but also what they mean to you financially. Make a list of your current financial responsibilities — what you owe, who you owe and your interest and payment amounts. Add to this list all of your expected financial liabilities, such as increases in insurance premiums or a new home purchase. Add in your daily expenses, such as food and petrol money.
You’ve now completed the first step in your own personal family budget. This will be your blueprint of how you will spend and save. Add up all of your monthly income. Subtract your expenses you have listed from your income. The result should be a positive number. If it isn’t, you are spending more than you make, a grave financial mistake. You need to find places to cut back so that you don’t fall further and further behind.
Many children believe that the ATM machine is a magic way to get money for what they want. They will demand everything, assuming that you only need to go to the ATM machine to get money for what they want. Adults should know better. Money at the ATM machine comes from your bank account and if you use credit cards, they need to be paid off. This is your top priority — you have to get out of debt. Don’t charge anything that you can’t pay for on credit cards. Train yourself to resist using credit cards if you cannot pay the full bill at the end of the month, or leave it at home. You won’t use it on impulse if you don’t have it with you.
These are just a few of the simple things that you have to know for an orderly, successful financial life. Since it seems like no one ever sits down and teach them to you, you must take the initiative and invest in yourself by learning them on your own. This may prove to be the best investment you will ever make! Please CLICK HERE to watch on You Tube.