Helpful Tips to Manage Your Money Better
While the cliche that “money can’t buy happiness” may have a nice ring to it, in truth we all know that money matters. It is the very force that helps us address our needs and wants, pays our bills, enables us to maintain a reasonable standard of living as well as be able to spend on leisure activities that maximise our happiness. If you’re on top of your finances, chances are you will avoid facing problems at a later stage in life.
So here is a list of 4 easy ways to manage your finances better.
1. Start budgeting.
Depending on whatever payment arrangements you have with your employer, every week, fortnight or month when you receive your pay, it is vital to set aside an amount for spending on everyday items such as fuel, parking, movie tickets, concert tickets, food, drinks, etc. Some of the everyday things we spend on are obviously more important than others, for instance fuel over alcohol. But the stuff you spend on that counts as leisure should be budgeted for in advance. To put it simply, a budget is a designated amount of cash you set aside and tell yourself that that is all you will spend on the things you are budgeting for. If by the end of your week, fortnight or month you feel you have nearly reached your budget limit, then it is a good idea to be watchful and wait patiently till your next pay comes in, and repeat the same drill. Budgeting is essentially a self-imposed cap on your spending habits, so that you don’t overspend and end up regretting it later. The best way to budget is by keeping your saving and spending accounts separate. Check with your bank to see if they have any special accounts on offer that are specifically designed to suit your purposes.
2. Avoid credit card debts.
A credit card is essentially a piece of plastic that gives you money that does not exist in exchange for taking back money that does exist, with interest. For the lender, it is a great tool for making profit. For the borrower, it can only be a great tool for you if you are one of those rare and lucky individuals that can control their spending habits. Let’s just say that most of us aren’t that disciplined. With most credit cards with the major lenders, there is the 44 day interest free period. If you do feel you need to get a credit card, make sure you budget for that as well as per the earlier point. Try and limit your use of the credit card for emergency purposes only. When you do use it, ensure that repayments are made within the interest free initial period. Better yet, try and get a debit card instead of a credit card, which is a great little product that functions exactly like the credit card, and let’s you make online purchases, except with money that’s your own. So you don’t owe anyone anything!
3. Keep an eye on your credit rating.
Most of us tend not to even realise that we have such thing as a credit rating, which is an on-going record of your financial health. One would usually only find out about their credit rating when they go to apply for a loan through the bank. Keeping an eye on your credit rating from time to time will alert you to any suspicious activities as well as let you address any irregularities and be able to consolidate your financial reputation. There are several websites going around these days offering people a sneakpeak into their credit rating history for a cost, the one we recommend is VedaAdvantage http://www.veda.com.au
4. Save up for unexpected expenditures.
Never overlook the possibility of ending up in circumstances that suddenly require funds you hadn’t prepared for in advance. For instance, the emergence of a new illness, a problem with your motor vehicle, or a telephone bill that happens to exceed your expectation. Anyone can prepare for what they know is coming. Wisdom lies in preparing for what you don’t know might come. Always set aside a small amount of money for the unexpected. That way you won’t have to overdraw your credit card and be in debt.
Call 1300 307 155 and start saving today!
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