You should take good care of your own finances. If your own finances go awry, it will have a profound effect on your entire life. Many people neglect or neglect money matters, and it can slowly lead to very big problems. Even a couple of missions or problems can make it very difficult to improve your finances.
Loans – financing tool
One of the biggest problems in many people’ economy is loans. Loans became a problem, especially after the 2005 quick rush. Many people have a quick draw right now, but missed the high interest rates on these loans. There were sometimes hundreds of interest and expenses, and when the mailbox collapsed at the end of the month, many people went completely confused.
In this case, many resorted to another instant loan or loan to pay off the previous loan. This quickly caused a debt spiral for many that was difficult to get out of. Many people are still being followed by loans and quick leashes.
In this article we will look at how to get your finances in order!
1. Be smart when taking out loans
Since loans can very easily become a problem, you should be careful when applying for a loan. You should only be able to take out a loan when it is necessary and when your financial situation is such that you can afford to pay off your loan every month. A loan should never be borrowed for chronic money or for finance, for example, a shopping trip. However, if you are buying a home or needing a home remodeling, consider a loan.
Before you take out a loan, you should consider whether you want a flat rate loan or a floating rate loan. The Equal Loan Formula tells you how much you pay per month. Simply put, you pay the loan at a fixed rate the same amount every month, regardless of the direction in which the rate moves. The lump sum loan counter, for example, on the bank’s own website tells you how much a loan should be repaid per month, for example, with a 2-year repayment period. Use the calculator to think about how quickly you want to repay your loan.
If you choose a repayment method that depends on the movement of the rate, you may pay less interest than a flat-rate loan – or you may not. In some months the repayment may be less and in others much more. You should carefully consider which of these methods is best for you.
Before you sign a loan agreement, always remember to compare the available loans. For example, you can compare online loans with bank loans. Also compare payback times and interest and costs.
2. Make a budget
Making a budget is one of the easiest ways to manage your own finances. However, many are reluctant to set up a budget because it seems difficult or many are afraid that it will take a long time. However, creating a budget is much easier than you could imagine.
Start by listing all your income. Take into account all income, subsidies, investments and other potential income from your day job. When all income is written down, write down all your expenses one at a time. Be sure to consider all the bills you pay each month, such as rent, loan repayment, electric bill, telephone bill, food bill, and so on. Also, don’t forget to pay bills a couple of times a year, such as insurance.
Finally, deduct all your expenses from your income. This way you will know how much money you have left after all expenses. You also know if you have a plus or a minus. This will give you a good idea of how much money you need to save on your expenses or whatever you might have a little extra.
The basic idea is that you spend 50% of your income on the mandatory and most important expenses. These expenses include rent, loan repayment, telephone bill, food bill and electricity bill. 30% should be spent on personal expenses such as makeup, toiletries, movie tickets and shopping. The last 20% should be saved and this amount should also pay some extra loan repayments.
If your budget doesn’t look like this, it’s time to make some changes. For example, you can start by striking out expenses that aren’t mandatory for you. For example, if you spend a lot of money on dinner outdoors, you can cross out this and start cooking more. If you have a big gas bill, switch to public or even cycling – at least for a while.
Small changes can help you get your budget a little more accurate and ensure that all your bills are paid on time. At best, you still have some money to save.
3. Make a debt repayment plan
Life is much nicer when you have no debt. The less debt you have, the less stress you will have on your life. So make a workable debt repayment plan for yourself. List all your existing debts from lowest to highest. The idea is to pay off the minimum down payment on each loan every month, and a little extra on the smallest loan.
Once the smallest loan is fully paid off, you can use the amount spent on the smallest loan to pay off the second smallest loan. This is like a snowball rolling down a hill: speeding up. So you pay off your debts as quickly as possible.
Take the time and effort to carefully plan your debt repayments. This will pay off your debt and you will be completely debt-free in the shortest possible time.
4. Limit your spending
One of the easiest ways to save money and get your economy in order is simply to limit your spending. Instead of going out for dinner a lot, cook food at home. Or, instead of a big shopping tour, just buy one or two things. Visit retailers and buy used products, if possible. Instead of going to the movies every Friday, stay home and watch new movies on Netflix.
It’s even more fun to limit your consumption if you make it with your friend to save. Saving does not mean that you should always be without and always save – but can easily save for example a month and spend normally the following month.
Even if the economy occasionally has bumps and bends along the way, the best idea is always to face the problems face to face. Putting problems aside and ignoring them only makes the situation worse. In particular, loans and bad repayments can make your own bad cash situation. Likewise, spending too much money and reckless shopping can be a burden on your wallet and your own financial situation.
In a few simple ways, you can easily fix and manage your finances. The first thing is simply to settle your own loans and debts. Write them all down so you know how much debt you owe and how much you need to pay off the installments in a month.
Making a simple budget will give you a good idea of what your economy looks like. This will easily tell you whether you are on the plus side or the minus and what (if any) changes you should make to your finances. Generating a budget usually doesn’t take more than fifteen minutes, and once done properly, you just need to monitor and update it once the debt has been paid off.
If your budget looks like you are in or near the minus, a simple way to make a positive change is to limit your own spending. Instead of shopping every week, shop only every other week. Or, cook dinner at home instead of dinners.