With all the financial gurus and money experts on the internet and television it can be easy to get confused by all the different advice and tips. Basic financial advice is very simple though and can benefit anyone, regardless of age or other factors.
- Living within your means is possibly the soundest piece of advice there is. Spending more than you make is the fastest way to get into a vicious cycle of debt. There are usually a number of ways to reduce living costs without major sacrifice such as getting rid of cable, carpooling to work or taking the bus and cutting back on outings. Making more money will allow you to enjoy more luxuries, so consider asking for a raise or searching for a part-time job if certain conveniences are important to you.
- Set a realistic budget and stick to it. Be brutally honest about how much you make and do not include bonuses when figuring out what you have to live on every month, as well as what you actually spend instead of what you should spend. Adhering to this budget will require tracking expenses and the willpower to avoid spending more than you have allowed for. There a number of free online programs to help you track your spending and will provide monthly breakdowns to boot.
- Pay off all of your debt as fast as possible. It is much better to make some small sacrifices for a few months or years than to be stuck paying high interest rates for decades. Calling creditors may result in lowering interest rates or getting better loan terms on anything from credit cards to student loans to mortgages.
- Save as much of your money as you can. A healthy savings account provides financial security even when times are tough and can help make money through interest accrued on the balance. It is a good idea to have a reserve fund for emergencies such as car or home repairs in a separate account from the regular savings account. Ideally everyone will have enough saved to pay for their expenses for six months or more in case of unemployment.
- Keeping accurate financial records is one of the most important financial tips. These can be used to dispute fake charges or help with taxes as well as helping people plan for their future. Documents such as bank statements, tax returns, investment records and receipts should be kept in a safe and secure space and organized by year for easy reference.