Personal Finance 101: Tips For Saving And Spending

by Alexandra Wilson

When you think of finance, it is hard to not mentally picture Leonardo in The Wolf of Wall Street as opposed to bank accounts, investments, and personal budgets. (I mean, which is more fun to picture?) Many people neglect this part of their life until it becomes too much to handle and then start making a change. Although this is better than putting it off completely, it is always best to stay on top of dealing with your finances, or it can get pretty stressful. I know someone who recently took out a Personal Loan to help her pay her bills after having her hours at work cut down. She mentioned how this has given her a little peace of mind as she knows she has money to buy essentials and pay her bills, but she is also still figuring out how to budget properly and keep track of her expenses. I reassured her that everything will fall into place if she is committed to making this change, which I know she is.
But even if your knowledge of finance is limited to what you have seen in movies, you can still jump-start your personal expenses with a little help from yours truly or a financial expert such as Dr. Lindsay Rosenwald, for example. And even if your financial dreams still involve stocks just like they did for Leo, you may want to think about receiving investment tips from somewhere like Stocktrades as they are known for being a reliable source of information on the latest stock market trends. For now though, here are the basics for having a handle on your finances.

Track your spending

You cannot keep track of your money if you do not know where it is going. Take the time to sit down and read through your last few bank statements. You will get a better sense of your spending trends as well as your good (and bad) habits. Not only will you understand how you handle money, but you can pinpoint areas where it is easier to save instead of spend. Pay close attention to ATM withdrawal fees, excessive use of Uber, and too many online orders. (We are all guilty on that last one.)

Understand your pay cheque

It is one thing to know how much your annual salary is, but do you know how much you bring home each week after taxes, insurance, and other fees are taken out? If you are having trouble understanding all of the calculations and your pay cheque, schedule time with your HR representative and have them walk you through it. While you are visiting HR, you should also ask about…

Direct debit hacks

If you have ever had to personally deliver your pay cheque to the bank on a regular basis, you know that it is a task that can easily be handled by direct debit – where your company deposits your pay cheque directly into your bank account (e.g: you can start spending as soon as it becomes pay day). Most companies that have direct debit will also allow you to deposit a certain percentage or amount from your pay cheque into a savings account. If you are unsure, ask your HR rep to walk you through it. If you do not ask, you will never know!

Monitor your credit score

Your credit score holds so much information! It can help you get a mortgage, lease a car, or even set up a mobile phone contract. You need to nurture your credit score so that you look like you’re reliable and responsible with money, and then lenders are more likely to let you borrow from them and will give you the best interest rates on top of what you borrow. Paying your bills on time and using a credit card are great ways to build up a strong credit rating. You can get a credit card with no credit
and use it to build up your credit. Any credit score 700 and above is very impressive and if you have a score this high, you should be incredibly proud of yourself!

Save, save, save!

We mentioned savings accounts above, but you need to set aside funds for the future on a regular basis. Aside from your usual account, set up a savings account to contribute to on a regular basis. Just remember first to do your research so that you find the best bank to open savings account with. For example, online banking is a game-changing solution for a lot of people looking to save money, and there are plenty of different options on the market nowadays.

Furthermore, I was speaking to a friend of mine about my financial situation and she mentioned something like a tfsa (tax-free savings account). I had never heard about this before, so I thought I would check it out. If you are like me and thought this was a savings account, that is understandable from the name. But it does work in relation to helping you save money, but without tax and interest. For anyone who is looking to improve their financial situation, this is worth looking into. Plan to not touch this account unless you have an emergency (this is why your savings are sometimes referred to as a rainy day fund)

Limit your card usage

While credit/debit cards are extremely convenient, they are also very risky. By treating our spending as magical transactions that occur through mid-air we become a lot less aware of how much we are actually spending. We are all guilty of that initial shock followed by the desperate denial when confronted with our monthly statement. To avoid this, try withdrawing a relatively healthy sum at the beginning of the month and use it for all your little expenditures. This way your bank account will not be ransacked by daily 3 coffee breaks and you use up all your loose change too!

And finally, make a budget.

The golden rule for making a budget is to follow the 20-30-50 rule. 20% percent of your take-home income should be geared towards savings and paying off debts. This is all well and good, but what are you supposed to do if your income doesn’t fully cover the costs of your debt? The longer the debt builds, the more you may have to pay back. In this circumstance, there are many options you can consider, such as looking at something like this car title loans ontario company. A car title loan is a short-term loan in which you pledge your car as collateral. Depending on the value of your car, you can borrow a loan up to that amount, and then you’ll be required to pay off the loan in installments after. This could be an efficient way of paying off your debt and getting money quickly and easily. However, if you do have enough money to cover these costs, 20% should be put aside for these payments. The 30% is for flexible spending, also known as expenditures that change per month. This includes food, hobbies, entertainment, and going out money. 50% should go to fixed costs, which include bills, monthly subscriptions, rent, and other usual expenses. Looking for even more personal finance and budgeting tips? Head to the Teach Me Personal Finance website for more money-saving and budgeting tricks.

The biggest rule about personal finance is that you should do what fits your lifestyle best. When you are making your budget, stick to what allows you to live a comfortable lifestyle and prioritize what is important to you. And who knows? You could find yourself on Wall Street in no time.

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