Understanding money is one of those skills that is everchanging and almost seems impossible to master. There is a new tip or hack that pops up that will revolutionize how we look at our wealth. Something you’ve done for decades could quickly end up costing you your financial independence.
Money is tough.
With that said, some money tips stay relevant year after year. From understanding loans (online installment loans through Personal Money Network provide valuable information on a popular loan type) to learning how to budget adequately, many tricks can save you from a massive headache trying to make ends meet.
Ready to learn more and take control of your finances? We have eight money hacks that everyone should know.
Online Installment Loans Can Be Good, In Reason
Some loans, like a mortgage or a car loan, don’t have that bad of a reputation. Then, you look at payday loans and online loans, and they come with multiple warnings. Although, yes, you do want to be careful how often you use them and what for, options like online installment loans can provide many individuals with much-needed financial relief.
An online installment loan is something you can apply online to receive a small lump sum of money (typically up to $1,000). Once approved, the lender provides terms for how and by when you’ll pay the loan back. These installments usually go for a few months up to a few years. Even someone with poor credit could get approved for these loans.
This type of loan is an excellent option when you’re in desperate need of cash. When an emergency expense occurs from medical bills, car breakdown, or even sudden unemployment, an online installment loan can provide enough financial relief to get you through your situation. However, remember that it is still a loan that you’ll have to pay back eventually.
Budgeting Never Gets Old
Maybe you believe that budgets are the old-school way of mapping out your finances. We’re here to tell you, though, that it doesn’t matter who you are, budgeting will help your finances.
Budgets are an excellent way to get a full picture of your financial situation. From where your money goes to how much you bring in, you can track every penny you spend. Building an adequate budget can ensure that you have the money for every bill and how much leftover that you can start saving.
Avoid Paying Just the Minimum
When you get your loan statements, there will be a minimum dollar amount that you have to pay. Don’t get caught up in paying only the minimum amount. Going that route will cost you more in the long run, and it will take you a long time to pay back your loan.
An effective debt strategy is always to pay more than the minimum. Doing that ensures that you pay the interest, and some go onto the principal amount. Other methods include focusing on one loan at a time, whether it be the highest dollar amount or the highest interest rate loan.
Your Credit Score Matters
When’s the last time you’ve thought about your credit score, or had it checked? Although you don’t want to check it very often as that can lower your score, it’s good to know where you stand.
Your credit score tells the bank or a lender how reliable you are with borrowed money. A high score shows that you make your payments on time and that a lender can trust borrowing you money. That helps bring down the price of getting a loan. Those with poor credit, however, will have a more challenging time getting loans like a mortgage or for a vehicle.
Build up your credit score by paying your bills on time, purchasing with a credit card, and even making frequent payments.
Start Your Retirement Fund Right Now
In your 20s and 30s, retirement is likely the last thing on your mind. You’re just starting your career, building wealth, and beginning a family. Any money you have after your monthly expenses likely goes into a savings account with something in mind. However, you’re never too young to start thinking about retirement.
To retire, experts recommend having roughly 80 percent of your annual income saved up so you can live a comfortable retired life. By starting your retirement fund right now, you’re adding more year’s worth of interest gains to your total amount.
Setting Goals Will Keep You Motivated
Goals aren’t just for kids or reaching a healthy lifestyle. Setting goals is also an excellent financial habit to get into. They work great for keeping people on track with their spending, paying off debt, and building up wealth.
When creating a money goal, being specific with every part matters. How much do you want to have saved up by a set date? Put away 5 percent of each paycheque into a savings account for one year. Make one extra credit card payment each month to have it paid off by the end of 2020.
Get Into Investing
Have you heard this tip before – start investing right now? That’s because you should be. Investing is a simple way to grow your wealth without doing too much. Even if you’ve never invested in your life and don’t know where to begin, there are people out there ready to help you. Just make sure it’s a good investment for you and your lifestyle.
Amp Up Your Emergency Fund
It’s hard to set aside money into an account you don’t want to touch unless you absolutely have to. Especially if you’re paying loans and could use that money, building an emergency fund may seem like an unrealistic idea at the moment. Except, you should start right now.
Emergency funds are for just that – an emergency. When unexpected expenses occur, don’t put yourself into debt. Instead, that money you’ve set aside each month for those “just in case” moments will be there to support you.
These eight money tips may not make you rich right away. However, they are smart financial tips you should know to keep you in control of your bank account.