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Character and personal finance are the only investments that are worth anything.

  • Apinya Kamon
  • Posted Articles: 13
  • Last Posted: 2017-07-03 09:51:41
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Handle Financial Matters the Right Way

2015-11-27 08:39:23

Even though personal finance has become more popular through the years, only very few people know to manage their money. You may think dealing with financial matters is difficult, but that is not the case. Here are some tips to handle your finances the right way.



Create an emergency fund. Pay yourself first. Create your emergency cushion the moment you head into your first job. The sooner, the better. Your fund should be at least three months worth of expenses. Saving money for the rainy days can keep you out of trouble financially. And when you consider this as a non-negotiable monthly “expense”, you will have more than just an emergency money to save for other things: retirement, vacation, or down payment for a house.



Itemize where your money goes. This is to ensure your expenses are not exceeding your income, which can be done by budgeting. Once you list down your expenses in a month, you will realize making small, manageable changes in our daily expenses can have a huge impact on your financial situation. Also, when you keep a tab on your monthly expenses, you can save big bucks over time.



Discipline yourself. Most young professionals tend to splurge because they think they have all the money in the world. But that should not be the mindset. Instead of going on a shopping spree, why not learn the art of delayed gratification? Yes, you may buy anything you want on credit, but it is better to wait and save up for that, unless you want to pay interest on that item. Granted you want to retain your credit cards for the convenience factor or the rewards they offer, make sure you pay the balance in full once the bill arrives, and do not use cards you cannot keep track of.



Control your own financial future. Before you even think of asking someone to do it for you, read a few fundamentals about personal finance. Once you are equipped with financial knowledge, do not let anyone catch you off guard, regardless if that person is your significant other or a loved one. Understand how money works in order to make money work for you, not the other way around. If you let other people do the work for you, they might take advantage of you. Better be safe than sorry.



Save for retirement now. It really pays to prepare for your retirement in advance. Because of compound interest, the sooner you begin saving, the less principal you will have to invest to come up with enough amount of money for your golden years, and the sooner you can start working on an option, rather than necessity.



Manage your taxes. Understand how taxes work even before getting your first salary. When a company offers you a starting income, you need to find out if that salary will give you sufficient money after taxes to meet your financial goals and obligations. There are various online calculators that you can use to determine your own payroll taxes, including Paycheck City. These calculators will show you your gross pay, tax, and your net income or take-home pay. In the long run, you will also be better off if you learn to prepare your annual tax return yourself.



Take care of yourself. Good for you if you have a health insurance. If you are not insured, apply for health insurance. You can save money by getting quotes from various insurance providers to get the lowest rate. Taking care of yourself also means keeping yourself healthy, such as maintaining a balanced diet, exercising, and shying away from vices.



Guard your wealth. Take necessary steps to protect your hard-earned money. For instance, if you are renting a house, obtain a renter’s insurance to secure the contents of your place from events such as burglary or fire. Disability insurance provides a steady income in case you become unable to work for a prolonged time period because of injury or illness. If you need managing your money, look for a financial planner with reasonable fees and who gives unbiased advice that is in your best interest. You may also want to shield your money from taxes, which is easy to do with a retirement account, as well as inflation by ensuring all of your money is yielding interest through investment vehicles like bonds, CDs, high-interest savings accounts, money market funds, and mutual funds.



You need not to be a guru or expert to manage your finances. All it takes is an ample amount of knowledge, discipline, and willingness to do this right.