Personal Finance Tips

The following is a guest post from ChameleonJohn.com. Finance is a subjective topic, and personal finance is even more subjective. However, here are some tips that should help you improve your personal finances and make you richer as each day passes by.

Personal Finance BasicsEmergency Fund
Yes, you have been told about this in almost every personal finance post/article you have read. But instead of nagging about it or skipping it, you should understand the reason behind it and even opt for it. An emergency fund is created to protect you from unforeseen events so that you don’t have to break fixed deposits or sell off everything when money is needed most.

We all know that unforeseen events like car repairs, expenses made for unexpected guests, accidents, etc. can derail your life and empty your bank accounts. However, with an emergency fund, you can go easy (to some extent, depending on your emergency fund) and maintain your daily life without too many hiccups. So, creating an emergency fund is important.

Debt
Although debt should be avoided, it is unavoidable in some cases. So, debt is not completely bad. It does help us when we are in need. However, we should try not to make it a habit. With regular loans, you might be used to interest payments and might not worry about it. Interest payments are an issue because it eats our savings and, at the same time, is an unnecessary expense. So, even if you have created the debt cycle, you should try to keep it on the lower side. Also, as and when possible, try to clear your debts and live a debt-free life.

Realize the Need for Money
Money may not be the most important thing in your life, but it still holds importance. But this is confusing. On one hand, we have to realize the need for money and on the other hand we have to make sure that we are not addicted to money. So, what should we do in this situation? The simplest way to get rid of this issue is that we should prioritize our needs and compare it with the value of money. For example, in you are hungry and you are okay with junk food because it might take an hour to reach home. In this situation, you should try to avoid eating junk food because the value of money and health should get priority. However, if you are really hungry, you should drink some water instead.

Net Worth is Important
We often give importance to our bank balance. However, net worth is more important because it helps us look at the big picture. Also, it keeps you accountable. So, the next time you think about your bank balance, remind yourself that the bank balance is important, but net worth is even more important.

Challenges Can Help You Save Money
Budget is a challenge. In fact, it is one of the best challenges. For example, if we have set an expense budget of $xxx amount for a month, you might be surprised to see extra dollars in your savings account if you try hard to restrict yourself and do not spend money on something that is not really important. Here, being logical is important. If you set an expense budget of $1 a month, things can look impossible. This can even de-motivate you to scrap the budget and free your mind. This can be worse because you will feel like spending more and more for something that is unnecessary.

Negotiations
Negotiating for a deal is important because it helps us save a handful of dollars. Negotiations can be difficult at times, but you should opt for it. However, you should know when one should negotiate for a deal and when one should not. Negotiating at the wrong time or for the wrong product can be an issue because you might lose an opportunity that might not come back to you with ease. For example, if you are negotiating for vegetables at the grocery store, you might save a handful of dollars on your purchases. However, if you are trying to negotiate for that last piece of watermelon and, at that time, there is another customer who is willing to take that piece of watermelon for the price noted by the shopkeeper, you’ll have to return home without watermelon. So, negotiations are good. However, you should know when one should negotiate and when one should refrain from negotiations.

Savings Should Go Into Your Savings Account
If you say that you have saved a handful of dollars today, it will not be counted as savings until it goes into your savings account. So, if you saved $10 today and spent it on other unnecessary items, it cannot be counted as savings. To note it as savings, you should put it in your savings account.

Sell
There are so many items in your house that have either never been used or have rarely been used. Don’t you think it is better to sell them so that you can earn some dollars out of items you might never use in the future? If you think this is a good idea, go ahead and sell them.

Revise Your Wishlist and ‘Need’ List
With your wishes, you want luxuries, but with your ‘need’ list, you want to live a happy, healthy life. However, one should revise their need and wish list regularly. This will help you know what should be on the lists. With upgraded knowledge, you will be able to avoid unnecessary expenses. So, revise them.

Online Shopping and Coupons
Opt for online shopping and you can definitely save dollars on your purchases. Online stores like Overstock.com deal in a variety and you can get almost every item listed on Overstock.com. Overstock.com even offers exclusive discounts that can help you get your favorite items at a discounted price. Online shopping is better because you can find coupons with ease too. So, look for matching coupons for Overstock.com and get a great deal on your purchases.

Note: Before choosing coupons, check their expiration dates. If coupons are expired, skip them.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

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