5 Financial tips for the first week of August 2013

By: on 2013-08-05
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Check out the 5 financial tips for the first week of August 2013.

Tip no 1: Debt should be managed while it's small, for otherwise it can get out of control.

Manage your debts when they are small and within your control. Use your savings and pay off your small debts. You can even work for a few extra hours to earn more dollars and pay back your creditors. Keep it in mind that once your debts go out of your hand, it'll be very difficult for you to get rid of them. For instance: if your debt amount is $90,000, then there is a great probability that you won't be able to pay it off on your own. You'll have to take resort to a debt relief option such debt settlement or bankruptcy.

Tip no 2: Make it a habit to modify your budget plan every month. This will help to adjust the extra expenses according to your income.

Compute how much you've spent and earned in the previous month. If you find that you've spent more in the previous month, then it is better to change your budget plan in the current month. For instance: if you've allocated $200 for your expenses, then allot $250 in this existing month. This will help you meet the additional expenses.

Evaluate your budget plan in the next month. If you see that you've spent only $225, then allot $235 for your expenses. Use the extra amount to meet your additional expenses. Never make a shoe-string budget for it will prevent you from adjusting to the changes in your lifestyle.

Tip no 3: Pride and jealousy destroy a person completely. Don't ever think that you'll be happy and satisfied by owning a bigger home or vehicle.

Don't buy a big house just because your neighbor lives in one. Remember, there is no end to jealousy. It won't allow you to live in peace. Moreover, a bigger house means larger expenses. You'll have to take out a bigger mortgage loan. You'll have to spend a greater amount on the taxes and insurance policies. This won't be at all good for all your personal financial health.

Be happy with what you have. Buy a house which you can afford to buy. Never ever try to attempt to buy a house just because your biggest enemy in this world has bought one.

Tip no 4: Wait till you grasp the concept of investing. Invest only when you've a clear understanding of investments.

Have a basic idea about investments before investing your money. You can't take risks about your money, especially when most Americans are going through debt crisis. Read financial magazines and go through various websites on investments. In fact, the best option will be to ask questions to investment experts. A lot of websites have 'help desk' wherein you can ask a question to an expert. The expert will give a detailed answer to your question. You can just read the answer to your investment related question and clarify your doubts.

Tip no 5: Debt consolidation gives you the courage to pay back your creditors. But it won't be of any use unless you change your spending habits.

Debt consolidation gives you a psychological boost. It gives you the confidence that you can really pay off your debts through a new and revised repayment plan. However, debt consolidation won't be of any use if you stick to your old spending habits. You'll incur fresh debts. As such, you'll have to arrange more money to pay off your new debts. This will complicate the financial matters. You may not be able to complete the consolidation process and as a result it will take a longer period of time to get debt free.

Last Updated on: Mon, 5 Aug 2013

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