![]() ![]() Getting your debt under control should be one of your main priorities when it comes to managing your personal finances. You can start putting funds towards your financial goals like saving for retirement, your emergency fund and your holiday fund. Instead of hoping you’ll be able to save in the future, you can start saving in the present. Once you have a budget in place, you’ve got a clear path to your financial goals. How do you allocate your spending each month? Do you have money left over after paying your expenses and debts? If not, your budget is in need of some adjustments. To make your budget, you’ll first need to review your income, expenses and debts. Your budget is the cornerstone of your personal finances. Consider depositing a smaller but consistent amount from your monthly savings into your emergency fund once you’ve reached your target goal. Some experts recommend having anywhere between 3 to 6 months of living expenses, but you don’t have to stop there. Next, set up automated payments to go through each month after you’ve been paid. How do you build an emergency fund? To start, open a separate high interest savings account. That’s a slippery slope to financial troubles! using a credit card) to cover these costs. Without an emergency fund, you’re stuck draining your personal spending or taking on debt (ie. It’s impossible to know what the future will bring, so being prepared for anything is the best option. You can think of it as a safety net for those last-minute expenses like when your car breaks down, you lose your job, and so on. ![]() ![]() What is an emergency fund? An emergency fund is a separate savings account that is put aside for unexpected expenses. Any payment is better than no payment, but aggressively paying down your debts when you can afford to will always pay off. If you’re not able to pay off your cards completely each month, still make an effort to pay over the minimum. If you continue to carry over the balance, you could be paying more in interest than on the original purchase itself.įor example, according to ASIC’s Money Smart, “if you have $4,400 of credit card debt and only make the minimum repayments, it will take you 31 years to pay it off and cost you around $14,900 in interest.” That’s $10,500 more than the original debt! To avoid costly interest payments from accruing, you’ll want to pay off your credit cards each month. This will not only serve as a relief during emergencies, but also give you great peace of mind to know you’ve set money aside for life’s unexpected moments. Spending less than you earn is also key to building your savings. Using a personal finance budgeting app can help you do this automatically in just a few clicks. They key is to track all of your expenses over a few months time to see what you’re really spending your money on (don’t forget to include credit card purchases!). Living within (or below) your means isn’t always simple when you’ve got expenses flying at you left, right and centre. This piece of advice might be simple, but that doesn’t mean it’s easy to follow. Here are some financial basics you can use as a foundation to build your personal finance plan. Whether your goal is to save more money, prepare for the future, or pay down debt, we’ve got you covered. ![]() If you know the basics of finance, you can do anything. You don’t need to be a financial genius to manage your finances, nor do you need to shell out a lot of money for professional help. Sometimes it’s the simple, age-old advice that rings the truest. There’s a lot of noise out there when it comes to learning the financial basics and managing your personal finances. ![]()
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