“To each his own,” as they say. What works for other people might not work the same way for you. That does not mean that you cannot learn from the experiences of others and ask for advice especially when it comes to your finances. In fact, you can definitely benefit from expert financial counsel.
There are proven tips and rules when it comes to handling your money. Some are ideal for students, some for young professionals, while others are more suited to those who already have families. Without some form of advice, it will be a challenge to manage your finances so you can save money for your future needs. No matter how determined you are in saving, there will always be temptations for you to spend your money.
What you need is a plan or a guide on how to survive from payday to payday and how to maximize your salary for short term and long term goals. Expert financial counsels will tell you that the key is to save first before you spend your money on your living expenses and personal indulgences. If you don’t you risk ending up with no money saved up at all.
You will also be asked to have an emergency fund. This form of savings is used only for, well, emergencies. It has to be liquid since the timing of use is not foreseeable. Hence, emergency funds are usually in bank savings accounts which you can easily withdraw. Depending on the need, the size of the fund may vary but the usual recommendation is to have an amount equal to 3 months’ worth of salary.
Another piece of financial counsel is to live a simple lifestyle. If you want to maximize your savings, don’t increase your expenses as your income increases. You should also limit your debt. Note that this is not limited to loans, bigger loans like car loans and housing loans. You might not realize it but your credit card balances are also considered debt. What’s more, your credit card debt can grow faster because of stiff interest rates.
If you already have a substantial emergency fund, financial experts recommend buying life and health insurance policies so you can have peace of mind. This frees you from worrying about the financial burden of accidental injuries and even death.
Your money grows and your priorities change over time. From time to time, you will have to reassess your situation, see if you are on track towards your financial goals, and make adjustments if necessary. Financial counsel on how you can manage your money better will always be beneficial to you.