- 72 percent of American families carry some king of debts.
- the majority of Americans will retire with less than $10,000 in annual income, and with little or no retirement savings.
*average family carries a credit and debt of $4,000 from mouth to mouth.
- the average household has 10 credit cards (with an average interest rate of 18 percent) “Money is one of the most important subject’s of your entire life, some of life’s greatest enjoyments and most of life’s greatest disappointment stem from your decisions about money. Whether you experience great peace of mind or constant anxiety will depends on getting your finance under control.” (Robert G. Allen) The more we know about money the more we can control it in a purposeful and liberating way.
Unfortunately, personal finances is a topic that is seldom taught in school, not that the school system is in error, but they expect you to learn in on your own. And since most of our time is term to be spend with our parent. Will are then tempted to learn from them. And in most case our parents weren’t Good at it. So we then found our financial world a failure. Has always been said that there are two things that sharpen your life. Association and study materials. And is also same to our finance.
Growing up, you may have eargerly looked forward to being on your own. No one telling you not to eat pizza for breakfast, being able to stay up all hours of the night, putting whatsoever you want on your Walls-what is not to love about it? However now that you are actually on your own, you may be a little well, terrified, along with adult freedoms come responsibilities. Such as getting a car, renting, establishing your credit bills and still have something left over for savings and fun. This guide provides you with what you need to know to succeed on the road to financial independence.
The most common cause of financial problems, such as having credit card debt or not being able to pay Bill’s and save, is spending more than what you are earning. Proverb 24:3-4 says “any enterprise which is built by wise planning, becomes strong through common senses, and profits wonderfully by keeping abreast of the facts”(tlb) and one of the best tool for managing your money successfully is to budget. You may be growing up now. Thinking budgeting is about as much fun, as taking a trip to the dentist. But it’s fairly painless process. A budget is actually a plan for how you will spend your money, will you all on bills? Not smart. Your first item on a budget list should be you, paying yourself.
The first step in creating a budget is to write down what your income and expense are now, figure out the categories you want to use. There are several areas. Where you might want to set aside money each month. Including groceries, babysitting, toiletries, pet care kid's activities gasoline, dry cleaning gift's, car Repair's, hair care entertainment and extras.
Will I'll look a it later.
Lack of attention=deterioration
Another step on the path to financial success is accepting responsibility. That you are in control of your financial future. And every choice you make can make an impact. No matter your age or education, you need to be in control of your financial matters. You can only be fully aware of your responsibility and obligations if you are involved from the start. It is okay to ask for help but you should be the one doing the work.
If you borrow money or enter into another type of financial commitment, you need to understand your rights and responsibilities and follow through with obligations from the debt.
- making your payment on time and in full and repaying the debt in full(including interest).
CHECKING ACCOUNTHaving a checking account makes life much easier, and it is much safer than keeping your money under your mattresses-what exactly happened if you do try to use your debit card or write a check when you do not have enough money in your account? That depends on the way your accounts is set-up. Monitoring your account balance is good way to prevent overdrawing or bouncing checks. it is necessary to check your balance every time you want to buy. A $1 pack of gum or $3 magazine? No. But it is good idea to do so whenever you are not sure if there is enough money in your account. In this day and Age, knowing your balance is a snap- most financial institutions will let you check it over the phone or online, (Remember to subtract from your balances the amount of any automatic debits that will occur before your next deposit and outstanding checks)
Prior to opening a checking Account thoroughly conduct a research to find a bank credit union, or other type of financial institution that provide an account that best suits your need.
Manage your credit card wisely
In order to have a good credit report and score, you need to have and use credit responsibly. Because credit are borrowed money. You must repay them, so don’t spend more than you can afford to pay in full, if you do not pay your balance in full each mouth, interest will accrue and will be added to the total amount you owe but amist all this tremendous benefits of credit card. Poor use of your credit card can rapidly place you into debt.
But it's also important to note and compare the features of each card, including the;
*annual percentage rate (APR) this is the interest that you are charged on any balance that you Carry over. Or do not pay off your balances in full every mouth, the APR is not important. But doesn’t Hunt look for a card with low (APR)
*fees:it is standard for creditors to charge a fee for paying late or going over credit limit. But you should avoid a annual fee unless you are new to the credit system.
*credit limit: the credit limit is the maximum amount you can borrow at any given point in time, having a higher credit limit is better for your credit score. But if you are worried you may overspend is Good to go for a low credit limit.
Limit your number of credit cards having only a few (or one) credit cards will make it easier to manage, your spending and prevent overspending. And don't always carry your credit cards with you. Having access to money you wouldn't typically have. If you leave the card at home you may think twice before using it to buy items.
Live within your means now, and then increase your means
Living within your means may seen like simple common sense, all you need to do is spend less than you make, right? For many of us, though. The reality is much more challenging than this basic concept. If your expenses exceed your income. You charge more than each mouth than you pay off. Or you’re not saying toward your goals, you are in fact living beyond your means. And cheating your self out of making the most of your money. Don’t get discouraged. Though there is a way to gain control over your finance. Most
of us have some expenses we can reduce or eliminate, while fixed living expenses are generally more difficult to adjust than discretionary expenses. If you are truly committed to your goals, a little creativity can go a long way consider each expenses carefully, is there anything you spend money on that you can reduce, substitute, postponed or forges.and beside that you ought to increase your financial education, and then do the real thing. Living below means is that the best alternatives that why you need to increase your means for a balance financial life.
How to create a budget
Establishing a budget and monitoring it on a regular basis is not easy, but it’s the best way to ensure you are in control of your financial future, think of your budget has a spending plan, it helps you be aware of how much money you have, where it needs to go and how much, if any, is left over.
- Determine your imcome
A.review your paystubs and check register to identify how much money you are earning.
B. Do not include overtime pay. It is not considered regular income.
- Determine your expenses
A. Review your checkbook register, store receipts, and billing statements to see where your money is going.
- Fixed expenses include items such as a rent, auto, or student loans that must be paid each month, theses expenses typically are the same amount.
- Flexible expenses includes items such as food, clothing and entertainment that vary from mouth to mouth.
B.list each of your expenses separately, do not group things such as eating out and groceries together and list them and food. Do not add cable, cell phone, power, and water together and list them as utilities. If you want to consider each expenses, you’ll want to consider each expenses individually.
C. Be certain to include expenses that are billed quaterly, semi-annually, or annually, each as taxes or insurance.
D. Always Remember that savings must be first on your list of expenses.
CREATE A BUDGET
A. a budget should meet your “need” first, then the “want” that you can afford.
B. Your expenses should be less than or equal to your total income.
C. If your income is not enough to cover your expenses, adjust your budget (your spending) by deciding which expenses can be reduced.
TOOLS FOR CREATING A BUDGET
make sure you choose a tool that is easy enough that you won’t get discouraged from using it. Each person has their own style. So be sure to pick the best one for you. If the if the calciltor above doesn’t work for you here are some other ideas:
A mapping your futures free and easy budget calculator:
°simple handwriting notebook
°microsoft excel spreadsheet
°money management computer or online tools.
REVIEW YOUR BUDGET
Be certain to review your budget regularly, does the budget meet your needs and help you achieve your goals? If not! Make some adjustments or create a new budget that better meets your