MoneyMagpie

Nov 26

10 important personal finance skills for a better life

Reading Time: 4 mins

A lot of times, people get in various financial situations that could be a lot better if a small amount of time, forethought and planning was in place. We often fall victim to accepting whatever is offered to us as it relates to things such as interest rates on various credit cards and car loans, fees associated with opening and maintaining a bank account, and overpaying for various items that could be purchased elsewhere for significantly less (and without losing quality) if we would just shop around first.

We could experience drastic improvements in our finances and our credit scores if we just took the time to see how things such as interest rates and fees have an impact on our lives – some of which could impact our lives for nearly a lifetime.

Additionally, our bad habits also have an impact on our personal finances, such as
-receiving excessive parking tickets as a result of not reading traffic signs that are posted right before us
-leaving the lights on when no one is using it
-paying for shopping bags each time you go to the grocery store when you have more than enough at home that you could use,
-making purchases on impulse, or paying your bills late when you have the money available when the bill arrives.

Another bad habit that many people have is
-getting excessive bank and NSF fees that could easily be avoided by making a simple bank transfer from another account or by setting up overdraft protection.
-Trying out offers on a trial basis, then paying for a subscription for a service that has never used.

Being negligent in these and other areas costs Americans millions of dollars each year. Most of these excessive costs can be avoided just by developing a few good habits. In doing so, it can significantly impact your personal finances.

If you’re like the millions of Americans who fall prey to the financial trappings that have a negative impact on our personal finances, then the information below may be useful for you. It consists of 10 very important personal finance skills that can drastically improve your life.

1. Set Up and Maintain a Budget

Although working from a budget is not a personal favorite of most people, it is a great way to control where your money is being spent as opposed to watching it dwindle down each month without any major accountability for how it was spent.

2. Avoid Excessive Fees Due to Negligence and Carelessness Altogether

One of the worst ways to spend your money is on fees as a result of carelessness. Start paying attention to those things that you can control. It will help you keep money in your pocket. Such as parking fees, late fees, NSF fees is and so forth. You’ll be amazed at how much you’re spending in these areas, which is mainly due to negligence and carelessness in most cases.

3.Develop Habits that Allow You to Save Money

Many people find it difficult to save money each month. However, it’s important to find ways to not only save money on your purchases but also to find ways to put money away each month as well.

4. Always Make Ongoing Sound Investments

You should always have various investment opportunities that you can take advantage of that are readily accessible. That way you can generate an additional source of income whenever the opportunity presents itself.

5. Monitor and Improve Your Credit Score

Monitoring your credit score on an ongoing basis allows you to always know where you stand.

There are items that sometimes appear on our credit report, such as inquiries, charge-offs, late or missed payments. These things can cause your credit score to be lowered, upon which has an impact on interest rates on items such as credit cards, car loans and so forth.

6. Continually Monitor Your Debt and Interest Rates

If you’re carrying a lot of debt, it will have an impact on your debt to income ratio. Therefore, it’s important to monitor the level of debt that you have and its impact on your interest rates; they are directly correlated to your level of debt and your credit score.

7. Transfer Credit Card Balances to Cards With the Lowest Interest Rate

If you have multiple credit cards, transfer the remaining balances of the credit cards with higher interest rates to the one that has the lowest interest rate. This will help you keep more of your money in your pocket by not paying for the additional interest.

8. Keep Track of Your Subscriptions, while Eliminating Those You Don’t Use

Many of us sign up for offers that are free or at least initially – until the end of the trial period. But then the paid subscription kicks in. However, most of us fall prey to paying for subscriptions that we don’t even use. To avoid this, keep a list of all of the subscriptions that you have and monitor the list on a regular basis. In doing so, get rid of those that are not relevant or that are not in use.

9. Shop Around For the Best Deals

Avoid waiting until the last minute to make a purchase. When you give yourself enough time, you can shop around to find the best deal for the same item.

10. Develop and Implement Good Negotiations Skills

Learning how to negotiate well is another way to keep more of your money in your pocket. It could save you thousands in the long run. Particularly when negotiating things such as salary and wages, mortgage rates, and interest rates on automobile loans and credit cards.

To conclude, the choices that you make as a result of your day to day decisions can have a lasting impact on your personal finances. That’s why it’s critically important to be alert about every decision that impacts your finances. Like Scott Langdon from MoneyTaskForce.com says, “it’s one thing to generate a personal monthly income, but how you manage it is what determines your quality of life.”

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