The Personal Finance Basics – Here Are The Things You Have To Know
Today, all too many people are attempting to take care of themselves (and their families) without a solid grounding in basic personal finances. These financial skills used to be taught in most schools, but now a lot of folks are left to fend for themselves. If you are one of them, don’t worry! There is no time like the present to pick up some basic financial savvy.
In order to set your personal financial house in order, you need to know exactly how much money comes into it and goes out of it. This means getting scrupulous about your record keeping. You should record all of the purchases you make and all of the income you receive. This record can be electronic or handwritten. If you feel tempted not to go to the trouble, just remind yourself that this is a vital step in saving money.
Your next step is to stay on top of the financial matters that others handle for you. Paperless billing has made it easy to let your monthly statements get away from you. If you still get statements in the mail from your bank and your credit card companies, review them carefully every month. If you have already gone paperless, make a monthly commitment to check your online records thoroughly. You are looking for any discrepancies between the companies’ records and your own; you need to resolve disputes as soon as possible.
If this gives you a lot of statements to review every month, remember that you can always simplify matters by closing out extraneous credit cards. Do not be afraid of living on one credit card; it actually makes great financial sense. You will find it easier to keep your debts under control when you minimize the number of creditors you have to deal with. Also, you don’t have to worry about negative effects on your credit score. The positive credit record you rack up by paying off credit cards will stay with you even after you close the card accounts down.
By this point, you should be getting a much better feel for the flow of money into and out of your household. Continue keeping a close eye on your cash. Make it a habit to pay off your bills as soon as possible. If you let your bills go unpaid, the late fees you are subjected to are doubly painful. Not only do you have to pay more money, you will also suffer penalties to your credit score. Do your utmost to stay current with all of your bills. If you let yourself slip into paying late, it can be very hard to regain your good financial standing.
Ideally, this article has helped you fill up a few holes in your knowledge of personal finance. A little time spent educating yourself in this area is rarely wasted. You can continue this learning process almost indefinitely, if you like. There is always something more to learn when it comes to handling your money well.