Personal Finance - three mistakes that people make with their money
I think I've heard it all when it comes to money. When people state that they are happy with their financial situation, know that their problems might fall into one or all three of the following categories.
Spending too much - When I grew touch money - real money. If we had no coins in my pocket just not happening. We had lines of credit, credit cards or overdraft protection. Cash was all I knew.
Often people buy things they do not need with money they do not have to impress people who do not even like. Renew - not based on need, but against poverty. After buying a house located at the top of your credit limit, add the toys (boats, quads, caravans, vehicles) and then travel book to "get away from everything." All this exacerbates the problem.
The "secret" financial health is to spend less than you earn. This could mean that not add to your closet until you absolutely need to do so. You may need to eat more at home and a packed lunch. Shopping is a trap we must avoid as it only tempts you to buy more. And remember, you do not have to try to keep up with the Jones. Living with less will give you a freedom that the Jones family probably does not possess.
NOT KEEPING TRACK OF FINANCE - When you do not know how much debt you have or when bills are due, you run the risk of overspending, the loss of a good credit score and paying excessive fines and interest. Even being one day late on a credit card payment can lead to a long delay in receiving payment and raising interest rates at various points. Crime is reported to credit bureaus and this can affect all future attempts of the loans.
In order to improve their situation and take control of your financial life will have to start getting honest with yourself. Start with four sheets of paper.
In writing "Assets" and a list of all items they own or are buying through payments (house, car, savings accounts, investments). Next to each position of the asset value and then put the total of all in the bottom of the page.
In the second page type "Liabilities / debts" and a list of all sums owed to others. Also record the interest rate, maturity date and amount of payments that are responsible for each item. At the bottom of the page to write the total amount owed and the amount of the payments required each month.
On the third page write "Income" and the list of all sources that make up the total monthly income (including rental properties, interest, work part-time).
On the fourth page write "expenses" and a list of everything you pay each month (utilities, food, clothing). Do not forget to add the total monthly payments you listed as "liabilities / debts."
Now that you have everything set may make a proper assessment of their situation.
Not having a plan - There is an old expression that says: "People who fail to plan, plan to fail". You may have to sell some assets to reduce debt or find a part-time work to increase revenue. Perhaps your credit card company will reduce your interest rate if you call them and make a commitment to pay a specific amount for the balance on a regular basis.
One of the first things you have to do to get back on track is to cut expenses. There are many creative ways to do this. For example, instead of buying a $ 5.00 coffee every morning, make a pot at home and bring a travel mug. This will save $ 100 a month that can be used toward the debt.The result is that the balance is reduced and the interest charged will be reduced next month.
You will probably be able to change things fairly quickly once you have a good plan in place.
When it comes to finances, small changes can make a big difference and, over time, can stop feeling overwhelmed to be in a strong position which will be in control of their situation. If you need help with this, please contact a psychologist who is trained in solving problems. The earlier you book an appointment, the sooner will be directed toward achieving their financial wellbeing.