Tips on Money Management 

by Layla Kent Thursday, February 24, 2011
We normally have control over fixed expense decisions at a time and then we are caught in the payment as long as the loan lasts or until we refinance with extra expenditure incurred during the process. Decisions to be made regarding which home we should buy or which car for that matter are very important in money management as they are normally the biggest payments that we will have in our budgeting. Such decisions will make us happy but they could also bring us a lot of grief if we are trying to buy something that we just cannot afford.

A general rule that is normally used for mortgage is to make sure your payment does not exceed your salary for one week. And if you would rather go in for a more conservative rule then it would be your net salary for a week. The rules that mortgage companies usually allow you for all kinds of debt may be a bit too liberal forcing you to work out some really strict budgeting. Don’t go solely by what they tell you but take into account your own situation, your personal finance and your common sense to know what will work well for you. This way you can practice good money management.

When you select a car, keep in mind that you will be caught up in its payment for anywhere between 3 to 5 years. In five years, your car will no longer be new so you can decide for yourself whether it would be worth spending that monthly installment that you will have to. Also, look into the fact that your car might be lying in the garage and might be hardly run while you would be still struggling with the payments. If you do effective budgeting, then your money management will automatically fall into place.

Student loans can be a worthwhile investment, but you must study the sacrifices that you will have to make to ensure that your borrowing is as low as possible. Saving and making a few sacrifices whenever you can make a lot of difference after some four years or so of student loans getting accrued along with the interest. It pays to do your budgeting; it is one of the best money management tips you can use.

If you take a look at your personal finance, you might realize that credit card payments can turn out to be fixed expenses as well especially if the balances are high and you are not able to pay a substantial amount beyond the minimum payment in spite of your budgeting. If you already have a high credit card balance and can’t pay much more than the minimum amount then you have got yourself into a fixed expense and a cycle that you can’t break out of so easily making money management even more difficult.

Resource Box: Budgeting can indeed help you stay on top of your personal finance. To learn more about money management, visit us now!

General | Categories: financial
0    submitted by Layla Kent
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