Financial illiteracy is a growing problem throughout the world, and as the recent housing crisis has brought to light, it can have dangerous consequences. There are a few basic financial tips that everyone can use to increase their financial literacy the easy way, and many of these tips can help you save thousands of dollars over a period of just a few years. Let’s take a look at what you need to know:
1. Checking accounts must be balanced.
If you are not taking the time to balance your checkbook every month, your risks for overdrafts may rise and you may be spending more than you would like. Set aside one day a month to completely reconcile and balance your checkbook.
2. How much house is too much house?
This problem resulted in countless foreclosures and it is continuing. Generally, you’ll want to take your regular yearly income and multiply that by three. That is the dollar amount that you can afford to pay for a house. Although it’s tempting to try to get a very nice house, it can also lead you to financial ruin if you are not careful.
3. Credit card interest rates can cripple you.
How many times have you actually read the interest rate on a credit card application before sending it in? Many now charge rates that are more than what a loan shark would charge, and this can quickly add up, especially over the long term. If your interest rate is over 12%, (which is still quite high) you may want to consider finding a new card with a better rate and transferring your balances over to it.
4. Good debt is useful.
Although the word debt has a bad connotation, there are forms of good debt that will help you grow your monthly income. Remember, good debt is debt that will help you increase your income. Bad debt is the kind of debt you get into when you spend too much and end up with a bunch of things that will only lose value and never repay you the purchase price.
5. Budgeting is essential.
In the midst of this credit crunch, it is clear that more people need to learn how to budget. It is not difficult once you get stated and by taking a more proactive role in your finances, you can see big results.
6. Adjustable rate mortgages can be dangerous.
In the best of times, an adjustable rate mortgage can be a very good thing. In the worst of times they can suck your bank account dry and leave you homeless. If you are about to get into an ARM loan, think long and hard about just how much interest you want to be paying, and what you would do if it suddenly rose.
7. Emergency funds are lifesavers.
It is a good idea to put at least three months of your salary away in a savings account to help protect you from those rainy days, lay offs and firings.
Photo Credits: 1
Originally posted 2008-12-16 05:12:30. Republished by Blog Post Promoter
Related Posts -
How to Negotiate with Credit Card Companies to Reduce Your Debt Today's article is a guest post by Andrew Wang... With consumers facing tough times in the wake of the financial crisis of 2008, it's a good opportunity to discuss the possibility of getting your credit card debt sorted. Most people assume credit card companies care only about the profits they...... -
Restore Your FICO Score – Part Three In the previous parts of this article we discussed how FICO score can impact your financial status as well as the initial steps that you can take to begin restoring your FICO score. We covered handling collections first since they do have a big impact on your overall score, but...... -
Debt Decisions If you are thinking about putting into practice debt leveraging in order to start creating more than one stream of income, it can seem like there are thousands of avenues open to you. For those just starting out, this can be very confusing and it is all too easy to...... -
Finding The Right Financial Balance If you are ready to get serious about managing your finances, it is vital to find that perfect financial balance that will help you reach your goals in less time. In many cases, simply finding that balance can make all the difference in how you view money and how well...... -
9 Warning Signs That You Have TOO MUCH Debt! When it comes to accruing debt, it is really and truly tough for people to face the cold hard fact that they are in way over their head. It's much easier for you to turn things around when you are aware of what the signs are for too much debt,......
Related Websites -
If only I made more money... Typically, middle-class people who are struggling financially think that things would be better if they only made more money. There are cases where making more money helps immensely: usually when you're making minimum wage or when you're at or below the poverty line. In those situations even a 50 cent...... - Pay off your car loan before other debts? If you have several debts that need paying off, there are a number of basic strategies to accomplishing this. Each one has its own pros and cons. I'll talk about three that have made the rounds, and introduce a fourth that is a bit different. Make extra payments on the......
- Financial Guru Review: Suze Orman This week's Financial Guru Review is about Suze Orman. Suze is the author of best selling books such as Women and Money, The Road to Wealth, and Young, Fabulous and Broke. Suze is a very popular personal finance guru. She's appeared many times on Oprah as a financial advisor and......
-
My Financial Meltdown: Part 3 This is part 3 of the Meltdown Monday series. You can catch up on part 2 here. My solicitor (it still feels weird saying that) gave me a bit of a grilling about my personal finances, and how stupid I'd been to have been taken for such a ride in...... -
Home Improvement Grants for Home Improvement Help If you are seeking out home improvement help, then one of the best things that you can do, at least on the financial side of things, is to get the home improvement help that you need by way of home improvement grants. If you are looking to sell your home......
Categories:
Budget, Debt, Personal Finance, Real Estate, checking, credit cards, good debt, loans
Tags:
3 comments ↓
Some very valid points made here. I like No.4 the best.
Some of these stuff I already know. I grew up already knowing how to budget stuff and learned that there is such a thing as good debt or good borrowing. Debt just sounds bad, but it essentially only means borrowed money. There’s nothing bad in that unless you don’t pay it back.
Ya i totally agree with this post, what i want to say is always check your credit card statement as many frauds are happening and budgeting is very much essential for all.
Leave a Comment