Remember when you were younger and you thought being an adult would be so awesome and incredible? We used to dream about having independence, owning a place and generally living our life. Then, once you become an adult, you realise life isn’t about freedom at all. It’s about having enough money to get by. It’s about paying bills and taxes, buying food and luxuries. Handling your personal finances can often turn out to be more of a challenge than you thought it would be. If you don’t watch energy usage, your bills are going to be through the roof. If you don’t pay back what you borrow your credit rating is going to suffer. If you’re already in debt, it can feel like trying to wake up for a nightmare. The problems never cease, but they can be solved. Here are some of our top tips for staying on top of your personal finances.
Keep To A Budget
The best way to handle your finances is to make sure that you are living on a budget. What this means is that there is a fixed amount that you can spend each month, and you are aware of it. Because of this, you should never go over it. That’s the idea, but it doesn’t always work out like that. We can’t guarantee that just because you are living on a budget you won’t end up in debt it’s not true. What we will say is that this will reduce your chances. But the fact is that there are emergencies that cut into your budget and unforeseen circumstances. You might find that you have to pay for an expensive home repair and that will throw your monthly budget right out the window. That’s why it’s also a good idea to save and we will talk about the best way to do that a little further down.
But if you’re wondering how to set up a budget it’s best to write down all your necessary spending through the month. This will include fuel, travel, food and bills. Once you have all that you should write it into a spreadsheet. You will then have the total you could spend each month and measure it against your income. The amount left over is how much you can spend on luxuries and other wants. But, you shouldn’t aim to spend it all. You should put some of what’s left over into your savings account.
If you’re trying to save money the best way is just to imagine that it’s another bill. You have to pay it because you have no other choice. Set it up as a direct debit so that a fixed amount goes out of your account each month. This could be a couple of hundred depending on how much you have left over. You can then transfer this money into a high-interest account and lock it away for a year or so. However, be careful how long you lock it away for. You might find that the economy changes, and it starts to lose money. If it’s in a locked account, you won’t be able to get to it before it loses value.
That’s why you can consider other forms of investment. For instance, you can invest your money in stock. You will need to use the services of a stockbroker, though. They will make sure that you do not invest in the wrong stocks and lose your money. You can invest in shares without a broker’s help, but it’s not always the best decision.
Or, you can invest in gold. Gold is one of the best forms of investment because it doesn’t change in value. Therefore, no matter what happens with the economy your money will be secure. However, it’s quite expensive to transfer your money into gold and store it.
As we have already said, one of the best ways to avoid debt is to stick to a budget and save money. But you should also be careful when you borrow money. The easiest way to fall into debt is to borrow from the wrong sources or at the wrong time. One example is bad credit lenders. Bad credit lenders will give you money even if you have a bad credit rating. The reason they do this is because they know that people with bad credit ratings are desperate. Due to this fact, they can put massive amounts of interest on the money. It can be as high as six hundred percent. This makes the loan impossible to pay back unless it is dealt with quickly.
The other type of loan to avoid like the plague are payday lenders. Payday lender give short term loans very easily. But again, the interest is massive, and while you essentially give away your next paycheck, you could lose a lot more.
As well as this, you should be careful how big you let the bill on your credit cards get. Remember, this isn’t your money to spend you are borrowing it. At some point, you will be asked to pay it back.
Getting Out Of Debt
If you’re already struggling with debt, you need to think about taking action right now. One of the first things that you should consider is consolidating your debt. This will reduce the amount you owe and put it in one sum. It makes it easier to pay off, and you can also work with the company to find a reasonable payment plan. Have a look at www.bestdebtconsolidationloans.org for the best debt consolidation loans.
You might also want to borrow a loan to pay off the debt you have. You should only do this if you can borrow money at a lower interest rate than the one you owed previously.
After that, you can think about using any assets that you own to pay off the debt. For instance, you can rent out a room in your home or your car. If the debt is serious, you can sell your house quickly and downsize. Once your position has stabilized, you will be able to buy back the property.
Once you’re out of debt, don’t forget to take the advice we gave you to avoid ever falling in it again. Live on a budget and always have some emergency money in savings.