Get a Tighter Grip on Your Money
Many people today are becoming more savvy when it comes to their personal finances. They are reading up on the benefits of prepaid credit cards, Roth IRAs, and more. The recent economic downturn has been an eye-opener for most of us. Others have been scared into being more financially responsible by rumors that Social Security may be going bankrupt or by more realistic stories in the media such families losing their homes after a serious of setbacks struck them. That old saying that money can’t buy happiness may be true, but it can buy peace of mind that comes with financial security. Here are a few tips for helping you better manage your own money.
Prepaid Credit Cards
You may have heard about prepaid debit cards or prepaid credit cards from time to time and wondered what they are all about. With a traditional credit card, you borrow money that isn’t yours, and you pay high interest charges on the balance until it is paid back in full. With prepaid credit cards however, you fund the available balance with your own money. So you are essentially borrowing from yourself. This is often used in place of a debit card to control extra spending such as for meals at restaurants, movies, fun shopping trips to the mall, and more.
Save First
Before you rush out and sign up for a prepaid credit card though, you’ll want to make sure you are saving a decent amount of money. Some people think that if they are contributing to a retirement account, that’s enough savings. However, money in a retirement account is not easily accessible for emergencies, for vacations, or for other more immediate plans you have. Money you withdraw early will be subject to hefty fees as well as taxes. Before you start funding your prepaid credit card with every last dime you have available, take time to fund a savings account. You should work toward having the equivalent of at least three months of expenses in this account, if not more. You can then use the account to save for larger purchases such as a new TV, a vacation, or a down payment for a new car.
Cut Your Budget
When people talk about cutting their budget down to size, they immediately think it will be painful. They think about long nights stuck at home in front of the TV rather than out with friends, or eating TV dinners instead of steak at a restaurant. The fact is that you likely can make some decent changes to your budget without changing your lifestyle much at all. Consider shopping around for lower rates on utilities, car insurance, homeowner’s or renter’s insurance, and even credit card rates. Consider refinancing your auto loan or your home loan, as interest rates today are very low. You can also consider analyzing your cable plan and cell phone plan and dropping to a plan that is more suitable towards how you actually use these services. Many people are paying for services they don’t or rarely use. You can probably save hundreds of dollars each month by taking time to adjust these expenses downward.
Managing your money is not quite as difficult as it seems. It’s more difficult to earn money than it is to spend it. So put some of these tips to practice, and you will find that you keep more of your hard-earned money in your bank account.
It really is hard cutting on budget specially if you have 4 kids who wants to eat every now and then
But you’re really good since you can always manage.
i love this! i so agree, we have to earn first before spending. it is so easy to just spend the money that we do not have yet, esp if we have a credit card.
That’s right. And we should not spend more than our earnings.