5 basics of personal finance in a crazy economy
A couple of days ago, I wrote an article on theP Pand its impacts on your personal finances. Literally hours later, the Federal Open Market Committee (FOMC), who sets the and is a major influencer on overall interest rates,P Pagain. Financial market volatility is giving you great opportunities to lock in a historically low mortgage rate, and, You should learn from this US government debacle and keep a close eye on your personal credit rating. There is a reason that the volatility in the market didnt dash my advice: I like to lean on the basics in times of financial market volatility.
With that premise in mind, lets review some of those personal finance basics that will guide you through crazy economic times. 1. Create a Budget. P You really have to start here.
Forget what the financial markets are doing and the economic pundits are saying write down your own microeconomic plan. Open up your checkbook and gather your credit card statements. How much money do you bring home. How much money do you spend in the average month.
Simply do your best (and it will be hard) to make the first number bigger than the second. It all comes down to buying a few less non-essentials and saving some pennies on the essentials. The Quizzle Wire is full of theseP. 2.
Pay the Bills. P Once you have a better picture of where all the money is, its time to pay up. The nice thing about the current financial market upheaval is that your interest rates on bills like credit cards and home loans are likely to go down, lowering your monthly payment. If you dont see this automatically happening, call your credit card companies and trusted mortgage expert and ask for a lower rate before this window of opportunity closes.
[ Free Resource: Check your 3. Save for Surprises PSurprises Happen. The Federal government has given us one right after another:Pcongressional budget drama, debt ceiling deadlines, SP credit rating downgrades, and fed funds rate announcement. Each has sent the stock market and interest rates on a roller coaster ride.
Layer on to that your own personal surprises: car breaks down, kids need braces, unexpected medical bills life happens. Having that 0 to 00, or better yet three to six months worth of expenses, inP. 4. Spend Wisely.
PStaying within your budget, paying the bills and saving a little bit on the side all starts with smart spending. First, you need to spend your money on things that are important, will last and add a little value to your life. It doesnt all have to be milk, bread and toilet paper. It should enrich your life in some tangible way.
For example, to get a better paying job I might invest in a reliable computer for job searches, and email before I grab the hot new video game release or upgrade to the expanded cable package. Second, are you shopping for the best deal, finding the right loyalty programs and asking for discounts. Taking a couple of minutes to fill out and use loyalty cards likeP Por theP Pcards and making a fewP Pcan really stretch your budget. 5.
Watch the Numbers. PFollowing these basic steps will definitely get you on the path to a better financial plan. However, getting to the financial freedom promise land requires watching the numbers: and Pmonthly. Protect your credit report from mistakes and identity theft.
Set-up spending alerts on your credit cards (available on most cards). Spending alerts can act as alarms to keep your credit card purchases under control. Regularly check with credit card companies and yourP Pfor lower interest rates and payments. And try to make it fun.
Most importantly, like a diet, you have to make it as pain free as possible. That meansP. Get your personal finances ready for any financial climate with helpful tools and advice from. At Quizzle, youll learn how to, and make better choices for a more prosperous financial future.