Everyone Needs These Money Tips
It can be tempting to avoid your personal finances, cross your fingers and hope for the best. But turning a blind eye can hurt you over time. Follow these four basic money tips to ensure you don’t damage your credit, run out of cash, or just find yourself financially screwed.
1. Budgeting is for everyone.
Whether you’re a student with only a few bills to manage or the wealthiest woman on earth, you need a budget. Budgeting helps you track spending, stay aware of your financial standing, practice responsible money management techniques, and avoid overspending.
2. Getting a raise doesn’t mean you should spend more.
An increase in income doesn’t automatically mean you can hit your favorite retailer or book an expensive vacation. While the occasional splurge is fine, consider using extra money to put more toward retirement, your emergency fund, credit card payments or student loans. Saving certainly isn’t as much fun as spending, but you’ll thank yourself in the long run.
3. Credit cards are for just that — credit. They’re not free money.
If you’re someone who has acquired massive amounts of credit card debt, make sure you’re paying off at least the minimum balance on time each month. If you can afford it, pay even more so that you can avoid paying large amounts of interest over time.
If you’ve managed to make it this far in life without credit card debt, do yourself a favor and don’t start now. The best way to use credit cards is for everyday necessities that you know you can afford, and then to pay off the bill in full each month. One way to get started is with a no-interest card with no annual fee, and then use it for one specific purchase, such as gas or groceries.
4. Retirement will pop up sooner than you think, so be prepared.
A common misperception of retirement is that it’s so far away, why think about it now? But in reality, if you’re a young professional, you have the luxury of starting to save early. The earlier you start saving for retirement, the more time your money has to compound and grow, allowing you to maximize your savings for when it comes time to say goodbye to the world of work. Take advantage of a retirement savings plan, such as a 401k, that your company may offer. Companies often match a percentage of your contribution, which is free money.