Whether or not you’re financially prepared, the financial market will follow its own logic and rules. So before you plan your next vacation or wrap the gifts for your next big occasion, determine your financial fitness. Ask yourself, “Am I financially equipped enough to bear any uncertain future events?” If answered no, here are some tips to follow:
Keep checking your credit report: This is the age of identity theft and if you don’t keep checking your credit report, you may see one fine day that your score has dropped badly due to purchases not made by you. Would you want to be victimized in this manner? Certainly not! Pull out a copy of your credit report in short intervals so that you know the mistakes that are hurting the score. Dispute all the erroneous information and make it error-free.
Purchase a home when you’re at the top of your finances: There are numerous mortgage applications that may fail due to mistakes that you commit while applying for the loan. Therefore, you should apply for a home loan only when you’re at the top of your finances and when the mortgage rates are low enough. If you unnecessarily delay while taking out a loan, this may kill the deal and you may be left with no other choice. Scan all your information so that you don’t fool yourself.
Invest carefully: When it comes to personal finance management, you must be wondering about the pros and cons of investment. Well, investment can certainly be a lucrative way of making money but with a single wrong step, you can fall into a huge mess. Therefore, do your bit of homework so that you can easily take the best decision about maximizing your returns and minimizing your losses.
Shop around before taking out loans: Nowadays most people require quick loans bad credit in order to meet their financial needs. If you’re into the habit of selecting the loan that you come across initially, you have to change this habit as this will undoubtedly lead to a bad decision. You have to make a comprehensive market research about the various loan offers by getting quotes from different lenders and then choosing the one that best meets your needs.
Use credit cards smartly: Advising you to stop using your credit cards may not make you happy enough. Instead be a smart user of your cards. Use a single card at a time and avoid making just the minimum monthly payments, shopping over the credit utilization ratio and making late payments on your cards. Whip your plastics only when you’re in an urgent financial situation and when you don’t have enough cash to buy something that you need.
Save money aggressively: The ultimate secret to living a debt free life is to save money aggressively. The financial analysts are of the opinion that one should save at least 10% of what they earn in a month so that they can build an emergency fund that can become beneficial during times of debt crunch. Irrespective of what you earn, you should be able to save at least 10% to see your funds growing.
Avoid committing over-looked mistakes again and again…
Yes, though you may feel unnecessary to go through some of the personal finance blunders as you’re already equipped with some of the best tips, yet, pay attention! Frivolous spending, living on borrowed money, never-ending payments, buying a new car when you can do without it, buying too much house that is beyond your affordability, treating your home equity as your piggy bank and living paycheck to paycheck are some of the most common blunders that people commit while managing money. Always keep in mind the cumulative consequence of committing the aforementioned mistakes.