As everyone is gearing up for the New Year, you have leave aside the old financial ideas and adopt the new effectives set of financial ideas to keep your personal finances in a state of order. Manage your finances in such a way that you can take the right financial decisions even during the event of a financial crisis. As we’re about to bid 2010 farewell, let’s check out some personal finance tips that can ensure you perfect financial management. Follow the bunch of tips mentioned below to manage your finances.
1. Don’t ever try to foretell the future:
As we are presently in the midst of complex financial challenges, it will be foolish on your part if you foretell the future and plan your expenses in that manner. You cannot decide what’s going to happen in the near future. Therefore, prior financial planning will never help you with effective finance management.
2. Always keep available cash:
If you’re unsecured about your job and you feel that you can lose your job any time, it is always recommended that you must have cash available for use. If you have extra cash at hand, you can easily avoid selling off your investments during emergency. You may not get the tax benefits of your investments if you sell them off.
3. Always diversify your investment:
Investing is not just about stock market investment, you also need to diversify your investments perfectly to minimize the risks. Investing all your money in one stock may be a financial blunder and most investment experts advise investors to diversify their funds in stocks, mutual funds, bonds and cash equivalents equally.
4. Keep on contributing to the 401(k):
If your employer sponsors a 401(k) account and you’re not contributing to it, then that is another big mistake that you’re doing. Even if the markets are down, don’t stop contributing to your employer-sponsored retirement fund. You will get tax benefits and the proceeds of this fund can be easily utilized in paying off debts and other financial obligations.
5. Pay off credit card debts:
One more step towards seeking financial freedom is by paying off credit card debts. If you’ve accumulated a huge amount of credit card debts, it is better that you save money and pay off your debts. Leading a life with credit card debts can often become frustrating. Therefore, take help of debt relief programs or follow the personal finance tips to cut off your debt burden.
Therefore, if you’re looking for ways to handle your finances in a proper manner, you can follow the personal finance tips mentioned above. Control your expenditure and follow your budget to get the desired results.
Also pay off your house ASAP as the interest on that is just crazy! Imagine having your house paid off and not having to pay any rent….except for bills…That would be great!
When you said “Always diversify your investment” it reminded me that we should also diversify our monetization methods on our blogs!!!
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Thanks for some very useful and practical tips Samuel. I especially like the 3rd one, diversifying is always a good idea, so if one of your investments goes the wrong way, at least you have a few others to lean on. Diversifying is not crucial for when you invest, it also is a great way to deal with your income streams. By having a few different income streams, you can always be sure that if you lose one income, there are other ones supporting you.
It all comes down to this ” Don’t put all of your eggs in one basket”.
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Nice tips indeed – I would put paying debt and credit cards higher in the list, probably No. 1
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Twitter: craftybegonia
says:
Very practical advice, Samuel. I’m sure the one most people will find hard is the one about the credit cards, they have a way of becoming monumental debts!
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Twitter: dgupta5150
says:
You may want to add Variable Universal Life Insurance for #6. You can choose from fixed or variable securities and build cash value with your monthly premiums. It’s tax free in as well as out minus expenses.
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good tips! I also suggest that if people need to take some time to pay off credit cards then it is better to transfer your balance to another card with a 0 APR rate. No one likes paying interest
Also, many people suggest that you have 6 months of cash available on hand – and that is a hard thing to do for MANY people
good post!
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