5 Financial tips for the 2nd week of July 2011

January 14th 2013

Check out the 5 financial tips for the 2nd week of July 2011

Tip no 1 - Lower the usage of credit cards to avoid incurring huge debts

If you seriously want to avoid incurring debts, then it is better to lower the usage of credit cards. The interest rates on the credit cards are quite high. As such financial experts advise consumers to not use them regularly. You can make all your purchases in cash instead of credit cards. This way you’ll be compelled to spend only what you have in your wallet at a given point of time and not an extra penny. It is best to keep the credit cards for the emergency purchases and occasions. This will help you avoid getting into debt problems and lead a financially happy life.

Tip no 2 - Never co-sign for a loan if you can't afford to pay it off

Many a times, friends or relatives ask you to become a co-signer for their loans. Most of the times, you agree to their requests out of love and respect. But it is not always a good decision for your financial health. The reason is, as a co-signer, you are legally obligated for a loan. So, if the primary borrower fails to repay the loan, then the lender will come after you for the payment issues. In such a situation, you will be accountable to pay off the loan. Therefore, before becoming a co-signer for a loan, check whether or not you have sufficient funds to repay the debt.

Tip no 3 - Maintain your state minimum coverage requirements

Every state has some laws regarding the minimum amount of coverage you need to purchase. You can visit the state insurance commissioner's website to know about the minimum insurance requirements in your state. However, insurance experts are of the opinion that it is not a wise idea to buy only the minimum coverage. It may not be adequate for you. The Insurance Information Institute advises consumers to buy coverage as per their financial needs. You should explain you requirements to the insurance agent before taking out any insurance policy. The agent can tell you how much coverage you actually need.

Tip no 4 - Save regularly

Make it a habit to save money on a regular basis. You should save a set amount every month. This will help you meet your long term financial goal eventually. The saved amount can also help you meet emergency expenses without taking out a new loan. You can also utilize the saved amount to pay off your existing debts.

You can invest the saved amount in stock or commodity market and double your income. The extra money can be used to finance your son's college education. Make sure you use a sizeable portion of the saved money to contribute to the retirement accounts.

Tip no 5 - You only have to do a very few things right in your life so long as you don't do too many things wrong.

It is extremely important to take right financial decisions in life. It is the secret key to a happy and healthy financial life. It helps you avoid the money troubles with ease. For example, correct investment choices may help you reap profits and become a millionaire within a short period of time. You may not need to do anything in your life. But, too many wrong investment decisions can make you bankrupt in a single day. You can be financially ruined. Discuss with your family before making any financial decision. This will let you know whether or not you are making the right choice.

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