Money Moves to Improve Personal Finance

Handing the household finances is a tough job, in fact it is one that should not be tackled alone.  If you have a significant other, should work together as a team, after all it’s both of your money, or if you are living alone, it’s always a good idea to bring in a family member or friend that you can trust, or even better, a financial advisor.  If you are looking to give your personal finance a boost, try starting a few behaviors that may help.

Build Up an Emergency Fund

You never know what life is going to throw at you, so it’s always a good idea to be as best prepared as you can.  If you had a sudden auto repair that was more than you expected, a home appliance replacement that would cost thousands, or even worse, if you lost your job and it took months to find a new one, how would you handle these costs?  The simple answer is that the expenses would go on a credit card and worry about them later.  If you can put a few months’ worth of expenses in an account, you can have available cash if any large sudden expenses come up.

Reduce Unnecessary Expenses

Not only do you need more money coming in every month instead of going out, you need to reduce the money going out as best as you can so you free up more money for either paying off debt, saving for a rainy day, or more importantly, saving for the future.  If you can start paying attention to what you’re spending money on, you can then try and fix your spending behaviors.  Try looking at last month’s debit or credit card statement and go line by line.  Add up what should have been avoided, and you will probably be shocked.

Save for the Future

As you are continuing to free up money every month, more and more priority should be on saving for the future.  Retirement may be the last thing on your mind right now, but if you can start stashing away money now, it will have more time to grow over time.  A 401(k) is a great way to start saving, not only does it help relieve some tax burden, but your company may match contributions up to a certain point, so that is free money!

Take Advantage of Credit Card Rewards

I’ve gotten so used to the credit card rewards now that I put every single charge on a credit card so I can earn 1-4% cashback every year.  Now I’m talking the expenses that I would have spent anyways.  If you start charging just go earn rewards you will be in for trouble, so it’s always a good idea to set a spending budget so you can make sure you don’t go overboard and you’re not able to pay the statement balance by the due date, otherwise you start paying interest and that is just asking for financial trouble that could take years to dig yourself out.

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