5 Ways Poor Credit Can Cost You

Your credit is one of the most important aspects of your finances. Your credit situation can mean savings — or costs. In fact, poor credit can cost you significantly. And the costs aren’t always in terms of money. While the most obvious costs of poor credit are financial, you also have to watch out for some of the other costs of bad credit.

Here are 5 ways that poor credit can cost you, financially and in other ways:

1. Pay More In Interest

Anytime you borrow money, you are required to pay interest. When someone lends you money, the goal is to earn, and that means that they charge you an interest rate. However, the interest you are charged is usually based on your credit rating.

Poor credit means that you present a bigger risk of not repaying the loan. The lender could lose some of the money it has put up. In order to mitigate some of that risk, you are charged a higher interest rate if you have poor credit. On a short-term loan of two or three years, the extra you pay might amount to a few hundred dollars. For long-term loans, though, like home loans, you could pay tens of thousands of dollars extra because of your poor credit.

2. Higher Insurance Premiums

In some cases, you might pay higher insurance premiums because of your low credit. Some studies link poor credit to other risky behaviors, such as car accidents. Your low credit could, in some instances, result in a higher insurance premium. This means that you could very well pay an extra $20 to $75 each month because of your poor credit. Over time, that can add up to quite a lot.

3. Inability to Access Some Products and Services

Your poor credit might actually cost you in terms of opportunities to get products and services. If your credit is poor enough, you might not qualify for a cell phone service. You might want a specific credit card to help you get back on track or ease your cash flow, but you might not qualify because of your poor credit.

In some cases, a bank will check your credit before allowing you to open an account. If you have poor credit, you might be denied a checking account or a savings account. You might have to use costlier services, such as check-cashing services, or prepaid debit cards. These can lead to fees that can cost you more than $100 a year. Over time, that adds up and your poor credit can mean that you are stuck in a financial services rut that is hard to get out of.

4. You Might Not Get Certain Jobs

Your credit history might be used as part of a background check for certain jobs. If you are applying for a job that involves access to sensitive information, or requires financial knowledge, your bad credit can be a hindrance. An employer might worry that you can be bribed to share sensitive information or participate in corporate sabotage. In some cases, there might be a concern about embezzlement. In any case, your financial situation could raise red flags with some employers and cost you a higher-paying job or a promotion.

While employers aren’t supposed to check your credit score, the story that your report tells might be enough to cost you a good job. This can be frustrating, especially if you are otherwise qualified.

5. Your Relationships Can Suffer

 More on Bad Credit

• What Your Credit Score Says About You
• Build Your Credit Score Faster
• Relationships: Is Bad Credit a Deal Breaker for You?

In many cases, the things that come with poor credit — or that cause poor credit — add stress to your life. When you have a lot of debt and poor credit, and when you are worried about your financial situation and all the extra costs you are paying, it’s hard to maintain healthy relationships. Your stress and anxiety can make you irritable, and you might be reluctant to share the full extent of the situation with a significant other.

In these cases, relationships suffer. Whether you yell at your kids more, or keep secrets from your spouse, it’s not healthy for your relationship. Your mental and emotional health can also deteriorate as a result of the stress related to poor credit. If you aren’t careful, you could end up with costs that are even greater than the financial.

source: financialhighway.com

5 Financial Tips for Starting Your Marriage Out Right

Marriage is a huge life decision. Your marriage will affect all aspects of your life, including your finances.

If you are planning on getting married, it’s important to start out your life on the best possible footing. This includes starting out on the right financial foot. Before you tie the knot, here are 5 tips that can help you avoid some of the financial pitfalls that can come when you combine finances:

1. Be Honest about Your Finances

Before you get married, you need to have a financial show and tell. Be honest about your debts and where you stand. Your partner should also be forthcoming about his or her finances. Get it all out there on the table so that you can see what your combined finances could look like.

Once it’s out there, you can also get a good idea of where you need to go from there. Seeing the big picture can help you figure out how to improve your finances and make a plan for achieving your shared goals.

2. Determine Your Shared Financial Priorities

Next, you need to make sure that you have some shared financial priorities. What are the things you want to accomplish together? Do you want to buy a home?  Have children? Save for retirement? Use your money to travel the world? Give to charity?

If you start spending, and you have different priorities, one (or both) of you is going to be very unhappy if you are unwilling to compromise. When you aren’t spending money on the things that are important to you, it starts to feel as though you are “wasting” your money — and no one likes that feeling.

Make sure that you come up with shared financial priorities, and that on items that you differ on, you come up with a way to ensure that both partners are able to spend money on what’s most important to each.

3. Plan a Sensibly Priced Honeymoon

My husband and I didn’t have what many would consider a “real” honeymoon. We spent a couple of days in New York City. However, our honeymoon was very affordable. There are some that recommend you choose a honeymoon that you can pay off within a year. I prefer to save up for a honeymoon. Since my husband and I had something of a whirlwind romance, there was no time to save up for a grand vacation. And we had to be back at school a week later anyway.

Don’t plan a honeymoon that you will both regret as you continue to pay for it year after year. The same is true of your wedding. If you know that both of you won’t mind paying for the wedding and honeymoon for the next five years, then go all out. But you have to agree that it’s something you both feel is worth going into debt for, and worth paying all the interest on.

4. Create a Spending Plan that Works for You

Work together to create a spending plan that works for your situation. If you have separate accounts, you need to figure out who will pay what bills. Should you set up a joint account and each of you contribute money to the account to cover shared expenses?

Also, figure out how much you can afford to spend on groceries, entertainment, and other items. Look at your income and your expenses, and note recurring costs like insurance premiums, housing payments, and retirement account contributions.

You will also need to find out about obligations your partner has (and share yours). While debt is an obvious obligation, your spending plan will also need to take into account the possibility of child support and alimony.

5. Be Wary  of Taking on Your Spouse’s Debt

You don’t have to be responsible for your new spouse’s debt. But you have to be careful to keep it separate. Debt incurred before the marriage only becomes your responsibility (in most cases — check your state law) if you are added to the account, or if you co-sign to refinance the debt.

Think long and hard before you take on your spouse’s debt. You might find that it makes more sense to encourage your spouse to carry on with paying down his or her own debts.

source: financialhighway.com

The Emotional Effects of Debt and How to Deal

Debt can send out finances into a downward spiral fast. But besides being detrimental to our finances, there is also a strong emotional aspect to debt.

Denial

Often with overwhelming debt, people choose not to even deal with it. They let bills pile up and may not even realize how much they owe and try to ignore it. But denial is only going to make things worse with late and delinquent payments resulting in bad credit reports, higher interest rates, and late fees which lead to even more debt.


How to deal: Instead of hiding from it, deal with it head on. As difficult as it may be, the sooner you face the debt, the sooner you’ll be able to take steps to get rid of it. Write down every bill you have and the interest rate to make a plan on how you will start working towards getting out of debt. Call your debtors to see what type of payment plan you can work out with them.


Stress

Watching bills pile up and getting calls from people you owe can easily lead to stresss. Wondering how you’ll get out of debt and not seeing a clear solution is a stressful situation as well. Often people in debt will stress about mistakes in the past and stress about what the future brings instead of concentrating on what they can be doing this moment.

How to deal: The first step is to start working towards getting out of debt. Make a plan to cut spending to put more money towards debt and to make extra income. Having a plan will reduce the stress. Try the National Foundation for Credit Counseling’s budget calculator to create a plan that’s best for you.  Also, don’t let the debt consume you. Take time for free or cheap stress reducing activities like exercising, getting together with family and friends and reading and writing.

Embarrassed

 

It’s not a surprise if you’re embarrassed by the debt you have. You may feel ashamed and regretful of the mistakes you might have had or feel that you are alone with having debt. Unfortunately, having debt is common. According to Creditcards.com, the average American household has $15,950 of credit card debt.
How to deal: Understand that you are not alone in dealing with debt. Everyone makes mistakes or has events happen outside of their control that may lead to debt. Instead of being embarrassed, be proud that you are doing everything you can to get out of the debt.

Anger

 

Sometimes it’s easy to be angry at and blame a spouse or family member for digging you into debt. You may be angry that your spouse lost a job or took a pay cut and as a result, caused you to accrue debt. It’s estimated that one of the main reasons why couples fight or get divorced is because of arguing about money.
How to deal: With patience and communication, this is a time you can pull together with your spouse instead of breaking apart. It’s okay to calmly talk about your anger and disappointments together, but do so in a way that is productive instead of hurtful. Work together to come up with a plan for how you will rectify the debt.



Fear


It’s scary to not know how you will get out of overwhelming debt. You might also fear creditors calling or losing your home or car. When you’re trying to figure out your next step, it’s scary if you’re not sure what to do.

How to deal: Visit the U.S. governments website on dealing with debt to ease your fears and learn what to do. Once you’ve accepted any mistakes and start making steps towards getting out of debt, you’ll be able to lose some of  these fears. Don’t fear the people you owe, instead talk with them about your options for repayment.

Keep in mind that getting out of debt will take plenty of patience, planning, communication amongst both family members and people you owe, and a lot of hard work.

source: financialhighway.com

Options For Your Debt

Do you still stop by the pizza place for your lunch?  Do you still fill up on drive-through coffee every morning to fuel your commute in to work?  Do you still pick up a burger and fries on your way home?

If you have the money to outsource your meals, your snacks and your coffee, then you are probably using it to your best enjoyment. But if your debt is mounting, eating out and even eating take-out is not a very wise move.

And if you start having to scrounge for change to pay for that iced cappuccino, that is a clear sign that you really are down to your last dollar…  and that alone tells us that you could use some help better balancing your budget and managing your debt load.

Ironically, those coffees, snacks and meals you grab during the day are not just luxuries that need to be avoided because of debt; those luxuries are probably part of the reason you are in over your head. Sure, one take-out coffee is not enough to put anybody in debt. But a daily ritual adds up over a few years.

According to Consolidated Credit Counseling, people should not be ashamed to seek help when they need it.  We seek the help of doctors when we are sick. We seek the help of plumbers and electricians when our houses are in need of repair. We should be just as ready to seek the help when our finances are in trouble.

And options do exist:

• Bankruptcy
• Credit counselling
• Debt settlement 

Bankruptcy

Bankruptcy is the most severe option, and the one you might be stuck with if you really went to far and cannot climb back. But it is also the most disruptive. When you declare bankruptcy you really have to start all over again, and it can be long while before you bounce back.

Not surprisingly then, most people do everything they can to avoid bankruptcy. That is why credit counselling and debt settlement companies exist.

Credit Counselling 

Credit counselling is not the same thing as debt settlement. The idea of credit counselling is to find the best path for you to manage your finances and pay off all your debts properly, then budget to keep yourself out of debt in the future. The goal is to avoid bankruptcy, and also to keep your good financial name intact.

Before contacting a credit counselling service, be forewarned – you will have to step outside of your comfort zone. Way outside your comfort zone. You will have to follow a very strict and frugal budget.
In order to come up with the cash to pay down the debt, you will likely have to cut spending deeply. It is by overspending that you most likely got into this mess in the first place. That is your comfort zone and that is what needs to be overturned.

Debt Settlement

Debt settlement companies offer a different service. They offer a bit of a shortcut by getting some of your debts paid off at a lower rate. This can be very tempting, and sometimes even necessary. But it comes with a price. They don’t help you solve the problem that got you into the mess. They don’t help you fix your budgeting.

It is fair to note that debt settlement works with only some debts, and some might still come back to haunt you.

And both credit counselling  and debt settlement companies do charge a fee; even not-for-profit services cost something.

It stands to reason, if you are considering either credit counselling or debt settlement, that you are determined to avoid bankruptcy. If you are determined enough, you can cut your spending and fix your problems. If you are not determined enough, the comfort zone will win. In many ways, this is like dieting, but for your personal finances.

So back to those pizza slices and take-out coffees and drive-through French fries. They are not helping you balance your budget. They are not helping you avert bankruptcy. And in many cases, they are not helping your diet (but that really is another story altogether).

source: financialhighway.com

7 Lifestyle Habits that can Improve Your Finances

Too often, we separate our lifestyle decisions from our financial decisions. However, what we choose to do in terms of day to day living can impact our finances quite a bit. Before you assume that your lifestyle choices have no impact on your finances, consider the following 7 lifestyle habits that can improve your money situation:


1. Eat Better

One of the best things you can do for your health is to eat better. Healthy meals can not only help you feel better about your body, but they can also help you save money. First of all, creating a list and putting together a healthy meal plan can mean that your shopping experience is more cost efficient. Do yourself a favor, and plan to buy more raw ingredients, and then make your food at home. You will have healthier meals, and you’ll spend less on pre-packaged and pre-prepared foods. Plus, being healthier almost always leads to lower costs in the long run.

 2. Exercise at Home

Staying healthy requires some level of physical activity. However, you don’t need to pay for an expensive gym membership, or even expensive equipment at home. There are plenty of frugal ways to get exercise. Your own body’s resistance can provide strength training, and there are any number of cardio activities that you can do without spending money on expensive memberships and equipment. Exercise more to improve your health, and save money while doing it.



3. Get Adequate Sleep

Sleep is one of those things that we often under-rate. However, sleep can be an essential part of good health – and it can help you save money. Those who get adequate sleep are more likely to practice self-control in all aspects of life. A tired person makes poor decisions, and that includes spending decisions. Get a good night’s sleep, and you will make better financial decisions, and you will have more self-control when confronted impulse purchases. On top of that, feeling well-rested can also provide you with increased productivity, helping you make more money, or work more efficiently.


4. Maintain Your Things

Take care of what you have, and you won’t need to make as many purchases to replace items that wear out. Take care of your clothing, and you won’t need to buy new outfits as often. Regularly maintain your car, and it will run more efficiently, as well as last much longer than a few years. If you take good care of your possessions, you will replace them much less frequently, saving money in the process.


5. Keep Learning

Your knowledge is one of your most powerful resources. If you want better finances, keep learning. This doesn’t mean that you have to go back to school, or get an advanced degree. What it it does mean is that you should keep learning. Develop the skills that others want to pay for, so that you are more likely to find a good job, or get a raise. Learn the basics of running a business and make more money with a side gig. Or, you can just make it a point to learn about good financial practices so that you use your income to best effect.


6. Watch Less TV

One of the biggest time wasters out there is television. TV is expensive, too. When you pay for a TV package, you can spend between $50 and more than $150 a month. Just for TV! While we all need to be entertained sometimes, and it can be nice to unwind at the end of the day with a favorite program, you can actually get more done if you watch less TV. Not only can you save money each money by getting rid of the cable/satellite TV package, but you can replace that time watching TV with something else. Use the time to work on a side business, or learn about investing, or to engage in some other activity that will enhance your life and your finances.


7. Create Connections with Others

You never know when the right connection will help you in your career. Treat others with respect, and create meaningful connections, and you never know what might happen. You could find your new boss, or a new business partner. Your co-worker of today could be that great connection tomorrow. Treat others the way you want to be treated, and make the time to build lasting connections, and you could benefit financially — as well as creating fulfilling relationships.

source: financialhighway.com

6 steps to closing a credit card

Thinking about closing a credit card account? Closing a credit card account can prevent you from using too much credit, reduce your risk of identity theft and make keeping track of your finances easier. However, it can also have a negative effect on your credit score.

Part of your credit score is based on how much of your credit you actually use. When you close an account, especially a larger account, your credit-utilization ratio (CUR) will be affected and your score could go down. In addition, if the card you're closing was the first credit card you ever got, it could shorten the length of your credit history, which can also hurt your score.

Too many cards

That said, tell me if this situation sounds familiar: You have to buy a dress or a suit for a friend's wedding. It's tough financially, but it's their wedding -- a once-in-a-lifetime occasion. You pick one out and when you get to the cashier, he offers you an additional 20 percent savings if you sign up for their store credit card. Plus, with the card, you get free alterations. Done.

I've had a lot of friends get married recently.

Maybe you've encountered this situation too, and now you have too many cards for specific stores and would like to simplify your credit life a bit. Or maybe a card with an annual fee has outlasted its welcome in your wallet. In these cases, closing a card (or cards) can be an appealing notion. Here are six steps for getting it done:

1. Target the card that costs you the most first

If you are going to close multiple cards, close just one account at a time. Closing too many cards at once can cause your credit score to drop sharply from a snowball effect of the reasons mentioned above.

To determine which card you should close, calculate which one is costing you the most -- whether through the high annual percentage rate (APR) you're paying on its balance or the steep annual fee that's drawing nearer -- and make it your goal to close it first. Be sure to factor in any rewards you get from your cards, however, to make sure you're conducting a full analysis.

2. Pay the balance in full

This may seem obvious, but I've chosen to mention it so there's no confusion. Trying to escape a card that still has a balance is a terrible idea for a lot of reasons, not the least of which is the damage it will wreak on your credit report. If you can't pay the balance in full, consider transferring the balance to a card with a lower APR.

3. Declare your intentions with your issuer

I always prefer to try to cancel a card over the Internet first. It avoids the sales pitch from the person on the other line when I try to cancel. But if need be, call your credit card company and stay firm when they try to keep you as a customer. Remember your reason for calling.

4. Send a written confirmation of cancellation

Keep a copy for your records as well. This will give you more leverage if the account appears open after your verbal cancellation.

5. Dispose of the card properly

Once you're certain that the account is closed, cut up your card and dispose of it in multiple loads of trash.

6. Keep an eye on your credit report

If any errors, occur, it's your responsibility to correct them. Keep a tab on your score. It may take a few weeks for any changes to occur, but watch carefully to see if cancelling your card has a negative effect. If it does, weigh carefully whether you want to close any other accounts.

Whether you should close a credit card account can be a tough decision. Do the benefits -- which sometimes are only psychological -- outweigh the potential damage to your credit score? That's a call only you can make. But if you've struggled with overspending in the past, it is one way to reduce your temptation and simplify your finances.

source: moneybluebook.com

Insurance for College Students

College kids show up at school with a lot more than a big bag full of T-shirts and jeans. They also bring a slew of electronics—computers, printers, smart phones, iPads—that can be expensive to replace. Your homeowners insurance will generally cover students’ possessions if they live in a dorm, and it may provide coverage if they’re in an off-campus apartment, as long as their primary residence is still your home. The rules vary a lot by insurer; most require your child to be a full-time student and under age 24. 

Some insurers cap the coverage at college at 10% of the possessions limit on your homeowners policy. So if you have a $200,000 policy on your home with 50% of that amount, or $100,000, for contents, your kid’s coverage at college may be limited to $10,000. The liability limits are usually the same as for you (see Check Up on Your Home Insurance).

If your insurer doesn’t cover your child’s off-campus apartment, or if you’d like higher coverage limits, consider a renters insurance policy. That generally costs just $150 to $200 per year, says Melanie Loiselle-Mongeon, an independent agent in Pawtucket, R.I. If your kid has roommates (who aren’t related), each person needs to get a separate renters policy.

Car insurance. Contact your insurer if your kid goes to a college more than 100 miles away and doesn’t take a car. Your premiums can drop significantly (20% on average at Safeco, for example), but he or she will still have coverage when home for the summer or vacations. If your child takes a car to school, your insurance costs will rise or fall depending on the location.

Health coverage. Student health plans, which often cost hundreds of dollars each semester, may have exclusions and low coverage caps, or they may require you to get most health care through the student medical center. Children can usually be covered under their parents’ health insurance policy until age 26, so most families can rely on that insurance when their kid goes to college. (You may have to decline the college’s student coverage to avoid being charged.)

However, if you have insurance through a regional HMO with a small network of doctors and hospitals, coverage may be limited to emergency services if your student goes to college in another state. And even if your plan allows for out-of-network care, you’ll probably have to make much larger co-payments if the network doesn’t extend to the area where the college is located. Insurers with national plans, such as Cigna, typically have plenty of doctors and hospitals in-network around the country. “The best course of action is to request a summary of benefits for the new location,” says Kelly Brooke, of Cigna.

If no in-network providers are nearby, consider an individual health insurance policy. In most states, a healthy person in his or her early twenties can get coverage for $150 or less per month. You can get price quotes at eHealthInsurance.com or find out about local policies at HealthCare.gov.

By buying a high-deductible policy, you can keep premiums low and still have coverage for major emergencies (most plans must also provide some preventive-care benefits without co-payments or deductibles). If your child has a policy with a deductible of at least $1,200 and isn’t claimed as a dependent on your tax return, then he or she can make tax-deductible contributions to a health savings account that can grow tax-free for future medical expenses.

source: kiplinger.com

Raising children with High FQ

QUESTION: Hi, I read your article on PhilStar.com. I have two questions: (1) At what age should I start teaching my child about money? (2) Do you have a program (excel file or whatever) on budgeting or monitoring income and expenses? Thank you. – from Aireen Canales via email

ANSWER:

1. When I throw back the first question to parents, I get answers ranging from three to seven to teenage. However, I treat Financial Literacy as a journey and I think it’s best to start this journey really early on because it is a way of life.

So I encourage all parents to start the Financial Literacy journey of their child as soon as he is born. Open a savings account for him. That’s where you deposit the cash gifts that he will receive from friends and relatives on his baptism, birthday, Christmas and other occasions. Anyway, these are his money and it’s best not to commingle his funds with yours from the very start. Since he is still a minor, open an account “In Trust For.”

Can you imagine how many Christmases and birthdays there are before your child starts asking about money? And when he starts asking wouldn’t it be nice for you to say, “Honey, do you know you that you already have something saved up and invested?” This will set the tone of abundance in your child’s financial life. Just make sure that you are able to impart the correct values as you teach him about money so that this feeling of abundance is not confused with the feeling of undue entitlement. Entitlement means he can just use his money just because he has it and didn’t even have to work for it. Feeling of abundance is knowing that when money is conserved, invested well and respected, there will always be enough. And of course, this cannot be done in any great lecture but only by example from his parents.

As soon as your child learns to communicate, you can tell him that he does not have to spend all the aguinaldo and the birthday gifts he receives in cash. Make it a habit for him to automatically save and invest these gifts. If your child has godparents who regularly give him cash, encourage your child to invest these gifts in higher yielding instruments like fixed income investments and stocks. You may not realize it but your child has a higher risk appetite compared to you. He is still a minor and hopefully, you are the one providing for his needs until he becomes an adult. He has a longer holding period when it comes to investments.

When he goes to school and starts receiving cash allowance, instill the habit of setting aside a certain percentage of his allowance, say 10% to 20%. Create a system that is regular and automatic, if possible. When my sons started receiving cash allowance, we gave them a “treasure box” where they put their savings complete with a small notebook that records the amounts. When their cash savings in the box reaches at least P500.00, they deposit it in their savings account. When their savings account balance reaches way beyond the minimum balance, they invest in either fixed income or stocks. In other words, there is no need for them to keep their savings in low interest earning savings accounts.

As your child grows older, expose him little by little to your actual household expenses. You may show your utility bills to make him more aware about conserving water and electricity. You can bring him along with you when you do your groceries. Make a guessing game out of your grocery bill, restaurant bill, etc. When making purchases, explain to him your choices.

Money is an abstract concept and a lot of families use transparent jars or cute piggy banks to illustrate the concept of saving to their children. Some label their jars with Saving, Sharing and Spending to make it easier to understand for their young children where their money goes.

Remember that time is on your side when you start them young, so the earlier the better. To show the magic of compound interest to your child – i.e. how much he can accumulate by regularly setting aside money for saving and investing, go to Chapter 6 Magic of Compound Interest of www.RaisingPinoyBoyc.com. This will give you a free excel file wherein you can plug in your own values using your child’s actual savings and which will give you the amounts he can accumulate at different age levels.

If you think you missed out on this “as soon as your child is born” timing, don’t worry because the next best time is NOW! So start now.

2. On the second question regarding a program or file that can help you monitor your income, expenses and budget, there are free apps to choose from. Check your phone, if it is a smartphone, chances are there are various apps you can download for free. I tried using iXpense Lite on my iPhone and it was good. Since you carry your phone with you all the time, you have the ease of recording each time you incur an expense. It gives you a visual indicator of monthly budget vs. expenses, an expense summary for the month, average per day, etc. It also allows you to store digital photo receipts, generates graphical reports, and a lot of more.

I used it for quite some time to test it but when I changed phones I didn’t bother to transfer the data and since I’m a creature of habit I kept using my old and reliable (but now quite complicated) excel file which I started way back during the early years of our marriage. It has evolved from a simple Income Statement into a massive file called Monthly Cashflow and Income Statement. In the beginning, Expenses came after Income, now Investments come right after Income and the last items are the Expenses – our way of practicing “Pay Yourself First.”

The idea is to use something that you’re comfortable with. As much as possible, try to make it fun, and not too heavy an ordeal to record your cashflows. What we also do is to prepare Balance Sheets so that we know where our investments go. This makes saving and investing fun because we see our assets grow and it somehow helps us in delaying gratification. But that’s a whole new topic on its own.

For the meantime, I wish you Aireen and all the readers an enjoyable, even if sometimes challenging, financial literacy journey with your children.

source: philstar.com

Personal Finances: How You Manage Your Finances

Do you find it difficult to meet all your commitments due to personal finances ? Are monthly bills a problem for you ? If 'yes' is the answer you need to check how you manage your finances. Which of these two categories best describe you : a) A careful manager of funds, keeping your monthly budget in control so that you can deal effectively with any unforeseen money issues, or b) A bad finance manager who tends to spend their monthly income without considering the possibility of getting into debt with monthly payments.

If you answer b ... you can learn to keep your personal finances under control.

You may need financial advice if you have never planned financially before. You need to find out exactly what your monetary situation is, by getting as much information about it as possible. This information will give you an idea of your net worth financially, you should include assets, savings and property - then you will see more clearly what is left over for future savings. A personal finance budget is invaluable, this budget should include all of your income and expenditure. Accuracy is important as this will help you to realize your goals and future plans. All monthly expenses such as credit card payments must be included and scrutinize your statements so that you understand exactly where your money is going. This will aid you in prioritizing your expenses so you can make any tough decisions that may be necessary.

Do you have savings ? many do not bother about this until later in life but thinking about savings sooner is a good way to regulate your personal finances .. but don't forget that you have to meet your monthly requirements first ! Once you can do that, start saving, remember that you can't do it the other way around.
Also, consider your job, do you have a steady job with a reliable income ? This is not always easy to determine, for example if you work in retail there is always the possibility of job loss. Having a steady income may mean getting into a more secure job or, if possible, become your own boss. Above all be concerned with your personal finances these have to take priority over everything else.