Personal Finance tips for the New Year
Posted on January 10, 2013 by Rokhaya Sidikou, One of Thousands of Career Coaches on Noomii.
5 personal finance tips to help you improve your financial situation.
1. Pay yourself first: whether you are self-employed or work for someone, the first thing to do after each paycheck is to pay yourself. Before you start paying any bills, transfer 10-15% of your earnings to savings. That way, regardless of your financial situation, you are still building your savings. It is not the amount that matters but the consistency. If you don’t pay yourself first and wait to do so last, unexpected things might come up and you might not have anything left to save.
2. Budget, budget, and budget: establish a monthly budget and keep track of your expenses. You need to know where your money is going and you need to have a budget to keep yourself in check. This will allow you to know if you are overspending and what you are overspending on. Also, remember to look at expenses for the previous months and analyze your spending patterns.
3. Beware of credit card debt: Paying only the minimum balance will not get you out of debt. Credit cards are useful to build credit so it may be worth having one, but always try to pay the entire balance when the statement comes. Or better yet, after you use your credit card to make a purchase, make a payment for the amount right away. In other words, don’t spend money that you don’t have!
4. Establish a “fun” spending account: decide the amount of money to put aside just for fun on a weekly, bi-weekly or monthly basis. This can be used for a vacation, a special dinner, a birthday present for yourself or whatever your heart desires. 10% of your earnings should be a reasonable amount to set aside for fun. Whatever you are doing, you are working hard enough to earn the money so, it is only fair that you are allowed to treat yourself with it.
5. Keep it real: the key to your financial success is to be honest with yourself. You know your financial situation, so live within your means. You may want that $40,000 car but if you are going to struggle to make those payments, settle for a $20,000 car instead. Put a picture of the $40,000 car on your wish board and work on improving your financial situation so you can be in a position to afford it. You should never have a lifestyle that you cannot afford. Learn to live with what you have while you strive for what you really want!
