Where to begin
It is quite a task making decisions about personal finances. It can get blurry if you do not know where to begin. If your life has so much to do with activities that require good decisions, then you might wonder where to begin. Progress is slow in that aspect if you have not a clue what to do with certain information.
So, let us explore different ways you can utilize in organizing your personal finances so that you don’t find yourself in a bind.
Always have a “bursting out the seams” emergency fund
It may appear hard, but if you put more dedication in putting in money than withdrawing it, then it becomes quite simple. Most of us have the notorious habit of withdrawing money for the most unnecessary things that we end up getting to ‘tank empty’ real quick.
So when real emergency situations come up, you have not a penny to your name. You end up borrowing from a bank or credit union, or even maxing out your credit card which puts you in tremendous debt.
Start with a target amount of at least 1000 dollars and watch the money rise each month. When you make up your mind to set money aside for your savings, then the money accumulates. Set it in a way that you will not be able to withdraw, once you put it in. Decisions about personal finances have to be realized at this time because you have to acquire self discipline. Institutions you can utilize and make this possible are:-
- ING Orange Savings
- Ally Bank Savings
- American Express Personal Savings
Matching Funds at your workplace
When you have this at your workplace, you are in luck because you are getting free money and your 401k grows considerably without any of your effort.
The advantage is they will give you 100% of your money, no matter what may happen out there in the markets. It is a valuable option to have.
If you have this option at your job, make sure you make full advantage of it. You are guaranteed a fast growing savings without your financial input. This is a decision about personal finances that you won’t regret making.
Pay off Debts with High interest
This can make you have a very huge financial setback if you do not take care of it quickly. Decisions about personal finances can greatly benefit you if you follow through to the letter. Debts that you have pending that have high interest rates should be eliminated as quickly as possible. When you have stacked up on some good amount of savings, make it a priority to eradicate this high interest debts.
- Payday loans
- Credit card Loans
- Car Loans
Always ensure that you are current with these debts so that you don’t worry about late fees penalties that add up in the long run and you shall be shocked to see you owe almost double the amount that you are paying them in the first place!
Other decisions about personal finances; When it comes to your mortgage or student loans; they should not stress you too much since they have low interest rates. Furthermore, they come with tax deductions at the end of the year that help save you on a whole lot and give relief to your decisions about personal finances.
Withdraw all monies from your retirement account
If you don’t need it at the time, use it. Max it out and get the money. Taking the money away does not mean that you cannot start a clean slate and start saving all over again. Keep in mind though; those early withdrawals come with steep percentages. Just be smart in what you are doing in terms of getting the cash and then again using the same facility to accumulate more funds. It is sort of taking an investment to make way for another one. That decision about your personal finances will help you when in need of money the most.
Invest in a Brokerage Account
This is ideal for saving for a period of time. It is great if you want to invest long term. It is not tax deductable, but you can do whatever you want with it with no penalties or fines. It gives you some kind of financial freedom if you get it. There are no restrictions either.
Goals you want to achieve like:-
- Buying a house
- Getting your own business
- Embarking on a vacation
These are some of the reasons you would want to invest in this kind of account.
All in all, the best way to go is in summary; Create an emergency fund, Get out of that high interest rate debt and invest all the way and in any way!