It can be hard to determine whether a particular piece of money advice is right for you, and the Internet is full of ideas and opinions!
However, there are some tried and true pieces of advice that almost everyone can benefit from.
Here they are:
1. Budget Even if You’re Doing Well
Budgeting is an essential first step when it comes to good money management. Unfortunately, there is this stigma that comes with the word “budget”. When people are strapped for cash they say, “I’m on a budget,” and the word has become synonymous with tough times.
This is far from accurate.
Budgeting isn’t just for when you’re financially lacking. In fact, budgeting can do a lot of good for people in all income brackets:
- Budgeting shows you where
you are wasting money.
- It eliminates the guess
work. You’ll never say, “I’m not sure if we can afford that,” because with a budget you can know what you can and can’t afford.
- It gives you a financial
GPS. You know where you stand, and you know where you’re going.
- It turns money from fuel
into a tool. When you don’t have a budget, you have a limited idea of how much money you have. When you are on a budget, your money works for you.
- When your money works for
you, it empowers you to save and meet your money goals.
2. Handle Your Own Money
When it comes to budgeting
3. Pay Off Credit Cards
Paying off your credit cards
4. Don’t Inflate
If you have recently gotten a
Once you inflate
5. Be Smart With Unexpected
Let’s say you have recently
- Most money that suddenly
comes into your hands is taxable so you should set aside enough of the new money to pay its own tax.
- Consider your financial
goals that you had before the sudden windfall. Did you have debts? Were you saving for your kid’s college fund? Ask yourself how this new money can bolster your budget and possibly help you achieve your goals early.
- If you have no debt and you
have a secure financial future, then consider setting aside money for an emergency fund. You never know what might happen and a good safety net is helpful.
- It is okay to reap a
portion of the rewards, though. Some suggest spending 10% of a windfall on anything you want!
Ultimately, these five tips can apply
Celina Jones is a consultant and a personal finance writer who loves sharing money tips with the world.
Editor’s Note: I definitely agree with Celina’s tips. The first one about budgets reminded me about my post “Being on a Budget Doesn’t Mean You’re Poor.” I still think that being on a budget means you’re smart, and I’m a big advocate of it!
What do you think is the #1 money tip that can apply to everyone?
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