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October 23, 2012

Don’t Worry, Be Happy: Personal Finance Tips That Work

If you are in such a sad financial situation that you cannot afford to pay for the things you need, relax a bit. Just use the information in this article to learn how to improve your personal finances. When you understand how to deal with your finances properly, it will be much easier for you to stay on the right track.

TIP! Sell an old laptop. If it is working or the person fixes it, then one can sell it for even more than a broken one.

An emergency savings account that receives regular deposits is a must for those unexpected issues that can arise. You can either save for something specific, like your child’s college education, or pay off debt with the extra money.

Create a large calendar for your wall that has all of your total monthly costs, their due dates and your billing cycles. This way you will know when you have a payment that is coming up by looking on your calendar instead of you relying on having the bill in front of you! That makes budgeting easier and helps you avoid late fees.

TIP! Use the flexible spending account you have to your advantage. Flexible spending accounts can really save you cash, especially if you have ongoing medical costs or a consistent daycare bill.

In the past, thrift shopping was used as a last resort for those with severe financial constraints. This is no longer true. They often times have many quality items like name-brand clothes, furniture and top selling books. There is a lot of interesting items for children too and it makes it fun for them to go shopping there. To get the best selection, arrive early!

An ideal emergency fund should have at least the equivalent of what you make in three months. Every month, put ten percent of your income into a savings account.

Frequent Flier

If you fly all over the world on a regular basis, then you need to take advantage of frequent flier programs. A lot of credit card companies give rewards or discounted flight tickets to be redeemed from purchases for no additional charge. The miles accrued through the frequent flier program can be used for free or discounted hotel rooms.

TIP! You should always keep a spending account that is somewhat flexible. The money in this account is not taxable so that adds up to extra savings.

If you plan to send your children to college, you should begin saving in advance of their birth. If you don’t start saving for college when your child is young, their chances of going to college are very slim.

Consider that a job that pays better somewhere else may pay better because the standard of living in its area is higher. Moving to be closer to such a job doesn’t always pay off. Be sure you research how much homes cost and how much utilities and groceries are as well so you’re sure about moving there.

TIP! Get a checking account that is free. Go to your local banks or look into credit unions or online banks.

Avoid investing in poorly performing stocks out of a sense of loyalty. If the company that you’ve put money into isn’t doing that great after a while, you should take the money and put it towards something that’s doing better.

If you can avoid using credit or borrowing money, do it. Even though it is sometimes necessary to do these things, being debt free and saving up money is important. Some things you will need to take out loans on are things like a car or a house.

Real Estate

Debt does not have to work against you. Real estate can be considered a good investment. Homes and commercial real estate can gain value and you can write off as a tax deduction some of the interest paid on the loan you used to finance their purchase. Student loans are another example of good, sensible debt. There are many loans out there for students that have lower interest rates that don’t have to be reimbursed until graduation.

TIP! Take advantage of tax planning, in order to improve your personal finances. Think about opportunities for investments that your employer provides for investing your pre-tax income into qualified plans.

To be successful, you have to be good at managing money. Protect anything you make, and invest any capital you have to spare. Investing your current profits to grow them is a good idea, but you have to have good money management skills to make that work. It can be helpful to create a formula to guide your reallocation of profits and evaluate your results regularly.

Look at the money you spend monthly and build you budget around that information. Perhaps a part of your money is not spent wisely. If you do not do this, you will end up with no money. Consider using some sort of finance software as it makes the process easier and more enjoyable. Leftover money should be used either for debt payment or savings.

TIP! If you are new to financial independence, be cautious about using credit cards, especially if you are under the age of 21. Historically, credit cards were freely given to college students.

The more you know about your finances, the less stress they should cause you. Apply these tips to tighten up your financial situation, and keep learning everything you can about responsible money management. This is the start of a new money saving, debt-free you! Enjoy all the new possibilities!

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Filed under Personal Finance by Alan Sawyer

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