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Six Expert Financial Tips to Better Manage Your Money and Avoid Debt — an article on the Smart Living Network
November 8, 2019 at 8:00 AMComments: 0 Faves: 0

Six Expert Financial Tips to Better Manage Your Money and Avoid Debt

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Managing your finances could prove to be pretty tricky and challenging. Many of you are not comfortable with the idea of dealing with money matters. You may have been ignoring the concept of saving for your retirement. You may not have set up an emergency fund. Whatever your money-related concerns may be, you must start managing your finances at once so that you lead a smooth life without risks of falling into the debt trap. You must start embracing good financial habits. Take proactive steps to efficiently manage your money and avoid debt.

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In this context, you must realize that it is essential to chalk out a robust financial plan if you wish to steer clear of overpowering debt. Remember that you could accumulate massive amounts of debts by buying things that you simply cannot afford using credit cards. Statistics reveal that the credit card debt on an average for every American household was as much as $8,398 in the month of June this year. Moreover, your financial stability is often threatened because of overpowering mortgage payments, student loans, auto loans, etc. You must take proactive measures to better use and manage your money and time. Efficient money management could go a long way in paying for your college education, maintaining steady employment, launching your dream startup, or buying your home or a car without any risks or fears of foreclosure or repossession of your vehicle. You must take smart initiatives early in your life to safeguarding your finances and stay away from overwhelming debts. Let us explore some simple yet smart financial tips that should ensure smooth and consistent financial existence minus any crisis due to ever-mounting debts.

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Know & Understand Your Money Priorities

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Before you sit down to chalk out an effective budget, you must identify your financial priorities. You simply cannot skip this critical part of financial planning and management. Your focus must be on aligning your money goals and aspirations with your unique money habits. Focus is the hallmark of success in getting out of debt. If you are emotionally stressed and financially burdened because of massive credit card debt, your top priority in such a case must be paying off your outstanding credit card debt. According to experts, personal finance priorities would be aligning with your values. The chunkiest category would be reflecting what seems to be of prime concern to you. You may gradually reduce other less important categories for saving at maximum capacity especially, for your actual priorities.

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Determine a Budget

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As per https://www.forbes.com, you must necessarily chalk out a budget. If you fail to have a budget, you cannot keep track of the amount you are saving or spending, and the entire financial picture becomes blurry if you need to tackle your debts.

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Experts recommend utilizing a free but competent budgeting app for setting up your budget so that you could get a holistic view of your complete financial scenario. Many people love to use Personal Capital. This efficient money management tool could assist you in seeing your net worth and getting a clear picture of your finances.

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Purchase Only Things that You Need

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It is simply unbelievable to see the phenomenal amount of money we seem to be wasting on impulse buys. More often than not impulse buys are not what you need. You just buy an item spur of the moment and sometimes you never use that item in your entire life. Do not splurge on things that are not essential for the smooth functioning of life. Do not indulge in mindless impulse buying just because you have some savings or unspent money in your bank account. Before you invest in any product, think twice if that product is really necessary. When even after deliberating over the issue carefully for a while, you still feel that it is necessary to buy the product; you could go ahead and make the purchase. However, get into the habit of always scrutinizing if a purchase is necessary or not because on many occasions people decide that it is a better idea to save as compared to unnecessarily splurging.

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Do Not Go Overboard

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Stay away from overstretching yourself financially. It is quite natural for everybody to love good things. There is nothing wrong with being passionate about expensive sports cars or extravagant holidays provided you can afford them. You must desist from indulging in such expensive habits if you need to take out a loan or use your credit card for buying expensive sports cars or lavish holidays abroad. If you are not careful and keep depending on credit cards and loans, you are sure to fall into a serious debt trap. Remember it is of pivotal importance to lead your life within your means. If your finances do not permit lavish purchases then stay away from such extravagance unnecessarily. Instead of using a credit card or taking out a loan, you could keep putting some money aside every month in a vacation fund or car purchase savings. Or, it is best to opt for more reasonable alternatives. Opt for a cozy vacation closer to home or buy an older model of your favorite car.

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Consider Examining & Managing Your Debt

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You must meticulously scrutinize your debt situation. Identify things that could be refinanced for a relatively lower rate. You could consider student loan consolidation or transferring a balance directly to your credit card with lower rates of interest. Debt may not be essentially bad provided it is effectively controlled and properly managed. Things could get out of control and pretty dicey if debts are spiraling out of control. Keep monitoring your debts and identify all your outstanding debts, balances, and bills. You must start paying off all your debts systematically without letting them get out of hand. Numerous credit cards are offering interest-free periods. Hence, if you are presently paying exorbitantly high interest while using your credit card, it then becomes mandatory to examine the possibility of using a balance transfer special credit card. You may seek professional assistance from trustworthy companies such as NationaldebtRelief.com.

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Create an Emergency Fund

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As per https://www.thebalance.com, several individuals end up creating credit card debt post a major medical expense or an expensive car repair. Moreover, they do not seem to have access to savings. If you are well-organized, you would be setting up an emergency fund at the earliest. An emergency fund is pretty helpful in avoiding credit card debt simply by providing you useful cash for use while an emergency arises.

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Conclusion

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The most effective way of building financial security would be to make a smart and perfect plan. You must stick to a plan that would stabilize your finances and help you stay away from debts. You must tackle your debts with utmost priority and urgency to avoid any financial crisis.

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