Across the United States, 46% of Americans don’t have enough saved-up funds to cover any expenses needed in an emergency. These emergencies can include getting sick and unable to work or losing your job.
Unfortunately, one of the leading causes of people not saving money is because they need better personal finance habits. If one is schooled in financial literacy, they’re more likely to manage finances responsibly. This can allow them to save money, so there is a three-month “rainy day” emergency fund.
Here are five personal financial tips if your finance skills aren’t what you want. Keep reading to learn more.
1. Avoid Paying by Credit
It’s too easy to spend more than we have when we buy things on credit. However, if you use this tactic too much, you can find yourself in substantial debt. The first of our financial tips is to not succumb to temptation if you want something you don’t have available funds for.
Instead, have some self-constraint and make a savings plan to work towards. Once you have enough saved for the item you want, you can buy it and have peace of mind you’re not adding to any outstanding debt.
2. Start an Emergency Fund
Studies have revealed that many Americans don’t have an emergency fund saved up. Because we can’t know what the future holds, it’s highly recommended to set some money aside for a rainy day fund. If you lose your job, it could take a few months to replace it, so having an emergency fund can save you by covering your expenses while you’re unemployed.
3. Take Finance Lessons
We’re not born with innate personal finance skills, so it’s only logical to look into taking finance lessons. This is the third of our financial tips. Classes can give you a better idea of handling your money responsibly. You can look into learning more about:
- Filing taxes
- Starting a retirement fund
- Make a budget for income and expenditures
- Managing credit
- Handling debt
4. Create a Budget
It may seem like a lot of effort to sit down and plan a budget once a month. However, our financial advice is that this is a highly recommended step to improve your personal finance skills.
If you know your budget is ahead of time, you’re more likely to stick to it, and you can avoid excess spending that can put you in debt. Your budget should include listing your debit orders, expenses, income, and savings accounts.
5. Don’t Neglect Your Taxes
Doing taxes are something many people wish was taught in schools and often can feel overwhelming to tackle. This can be especially true if you’re working as a freelancer.
However, correctly doing your taxes from the beginning is a great way to stay on top of your personal finances. If you’re filing them incorrectly, or not at all, you could owe the government a lot more money, which is not financially responsible. You can learn more about filing taxes at tax school.
Use These Financial Tips Today
Being financially savvy is especially important in today’s climate. Costs and expenses are constantly rising, and if you’re not being financially responsible, it could land you in trouble when you’re much older.
While you’re young, putting money aside for important things like retirement and illness is essential while you can still climb the corporate ladder.
If you’ve enjoyed these financial tips, there are more in our Business Sense category. We also cover healthy living, legal talk, travel, and more, so there is something for everyone.