Unless you’ve taken some courses on handling finances, there is a chance that you may not be aware of a few of the key points about budgeting, managing your money and planning for the future. While a lot rests on common sense, there are a few techniques that everyone can use to correctly manage their finances and stay on top of their bills. Let’s look at some of the best tips that you can put to use right now.
1. You need to pay yourself a salary.
Sounds a little odd, doesn’t it? However, setting aside a portion of your income every month that will go into savings is one of the first steps on the road to financial security. The best amount to put aside is 10% of your gross earnings each month, but this may not always be possible. Try to get as close to that number as possible and watch your savings grow!
2. Always have money in case of an emergency.
The problem with emergencies is that you never know when they will happen. From losing your job, to a car accident, to an unexpected repair bill, there are financial disasters lurking around every corner. To protect yourself, you need to create an emergency fund that will not be touched unless you have an actual emergency. We recommend putting about four months of your salary aside for this fund if possible, however, anything you can put aside for a rainy day will be useful.
3. Always have a budget.
Even if you’re not restricted on your spending, you may need to be. Everyone can benefit from a budget and chances are, you’ll end up spending less every month. Take a hard look at your regular monthly expenditures and see where there is room for improvement. You should always have at least some money left at the end of the month, so aim for this goal when making your budget.
4. Paying your bills on time really does matter.
Even if your phone company doesn’t report late payments to the credit reporting agencies, this doesn’t mean that you should be late. Paying your bills on time forms a good habit and it will last throughout your life. Work your payment dates into your budget so that you always have enough put aside to handle all of your bills. If necessary, when you get paid, add up all of your set bills and then put that money aside immediately to be used when they are due.
5. Remember the key financial equation.
The key to getting ahead is to always make sure that you are spending less than you earn. It sounds very simple, but it’s not always easy to accomplish. The amount that you charge should be figured in to this equation for the best results. By keeping your spending under control, you’ll be able to start planning for the future right now, instead of when it may be too late.
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Originally posted 2008-09-01 05:35:11. Republished by Old Post Promoter
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3 comments ↓
You forgot:
0. Have an income sufficient to do all the other things below.
Somehow I doubt street people can pay themselves a salary.
fair enough
but even on teh street there are ways to earn more moeny…
It is funny how many people dont understand this. With my day job I run into hundreds of people trying to find ways to get out of debt when they should have never gotten there. Now of course some have medical etc but most just bought in way over their head and now are paying for it by having the extra stress. If they would have just used those simple steps they would have been able to keep out of debt and stayed on top of everything.
And Rich you are right. Everyone now days should be able to make money. With the internet available in most countries you should be able to make some sort of money. The lack of people wanting to try is the problem. 90 percent of the people want Free Money and are not willing to put in the work to earn it.
Jason
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