Tuesday, March 27, 2012

Develop your personal finance habits – Save money always

One of the most important aspects of your life is managing your personal finances properly. There are a number of instances in which you have messed up your financial condition because of bad personal finance habits. It is important that you should put things into right places before your finances get out of hand for you. Here are some good personal finance habits that should help you to get your everyday finances under control and live a financially stable life.

1.Use cash instead of cards – When you are out for shopping, it is best that you take as much cash as possible with you instead of carrying your cards with you. This is because there is a limit to which you can carry cash, however, when it comes to credit cards, they allow you to spend without any restraint at that point of time. Thus if you refrain yourself from carrying credit cards you will put an end to all your impulse shopping and thus reduce the monthly bills drastically.

2.Take a list with you when grocery shopping – When you are going out for grocery shopping, it is best that you carry a shopping list with you. This puts your perspective in the right place and thus you can abstain yourself from buying things that you don’t need. What you need to do is stick to your shopping list and then come out of the super market as soon as you are done. The more you linger around to do window shopping; the chance of you buying things that you don’t need but want increases.

3.Pay down your bills within a month – All your credit card bills have one month of billing cycle. Thus when you are using your credit cards to buy items, you should pay your bills in order to avoid paying interest on them. If the period of one month, within which you are supposed to pay your bill is over, you are charged interest rate on your debts. Then you have to pay more than what you had borrowed to get out of debt.

4.Use utilities judiciously – One of the major costs in your everyday life is your utility bills. The electricity bills, cell phone and telephone bills and fuel cost are some of the main utility costs that you have to incur. In order to reduce your electricity bills you should use a programmable thermostat and not keep the electrical appliances running when not in use. You can also disconnect the landline and use your cell phone only for making important phone calls and not for making chit chat with your friends. When it comes to fuel, you should save on it by using public transport or carpools while going to work and coming back. You should also try and cover short distances on foot instead of taking out your car every time.

5.Pay off your high interest debts first – In order to save money on your debts, you should pay off the debts which have higher interest first and then move to the next lower one. This method is also called debt avalanching. If you pay off the higher interest debts as soon as possible then you save the money that you keep paying on the interest rates in the long run.

Thus you can see how the above personal finance habits can address different aspects of your life and help you to save money in each of them. A culmination of all these can help you to get out of debt and stay out of debt.

Author's Bio: Marie Lewis is a financial advisor for EasyFinance.com. She brings an unique perspective on personal finance, frugality and all kinds of consumer financial products and services.

2 comments:

credit card help said...

I like # 1 (using cash instead of cards). People wouldnt be in as much debt given they did this.

Helle M. | Life and Business Mentor said...

Saving money can help avoid getting into debt. It is really wise to save our money properly. I agree with no. 1 habit, that it is better to use cash than credit cards. Thanks for this great post!