It is a scary sight in America to see an empty parking lot in a shopping plaza. Unfortunately it is scarier still to see one filled beyond its capacity for it is a conformative indication that some Americans have started shopping irresponsibly again. They shop beyond their means, that is, they shop for more than they have or earn. America is probably one of the few developed countries where its population is a major part of such a trend.
The education system often is blamed for this public indulgence because most schools do not have a personal finance class. This doesn’t mean that people remain ignorant of it, but they find some guidance outside the system to learn about this. There is no class for it at school but you definitely learn and you most definitely should learn personal finance because
- It is just as necessary and factual
- There is no other alternative other than handing over your finances
- It is needed so often that you do it without thinking
Surprisingly still not a lot of people save and a very few do. People need to get the habit of saving because borrowing from credit companies is not a lasting option.
If you are fresh to this territory and need to manage your personal finances then these could be a few helpful starting points for you.
- Save Money: If you are indeed fresh to the world of finances then this would be a harsh wake up call for you. The first lesson to better your personal finances is to start saving immediately and remember that you are doing it solely for yourself. These savings will be your backup when you face emergencies. In the present scenario where pink slips are a common occurrence, your savings can keep you afloat until you find your next employment. In order to achieve that try to build an emergency savings fund worth six to nine months of income, so that you have something to fall back on in times of dire need.
- Stop The Debt Slide: Once you start borrowing and continue to do so to cover the previous debt, you only dig yourself a deep hole which is going to be very hard to fill. This is so simple to figure and yet it is so strange that people keep doing it themselves. They keep borrowing under various names such as credit cards, 401k, home equity line of credit and the likes, taking money they never possessed in the first place. The solution to this is as simple and logical as figuring the problem itself. Just don’t buy things for which you have no budget for. Focus on your needs first and then check your wants if you have the means left to.
- Allocate Money: It is vital to know what to do with the money you earn. Divide your money according to the priority and as saving becomes a habit, a significant portion of it will definitely end up in your savings fund. Be it an income or a windfall. Treat your saving account as a maximum security vault that needs prominent reason for withdrawals to be made.
It is never easy at first but by and by you will get better, and you will not regret it.