Learn How to Manage Your Personal Finances
If you are like many New Zealanders, you struggle from time to time with your personal finances. Who among us hasn’t gotten worried about bills, or waited anxiously for the next payday? If this is your situation, these tips might help you relax a bit, as the following will help you discover that the key to financial freedom is in your hands!
The most important part of accumulating wealth is easy to say, but a lot harder to do; always spend less than you make. People who spend everything they make, or consistently spend more than they make and borrow to make up for it, will never accumulate wealth, because they always spend it as soon as they have it. Figure out how much you make, and spend less than that. This can be difficult to imagine, but there are no doubt people worse of financially than you, that somehow survive. This simple change of perspective can help you spend a bit less each week. Of course there is another option.
How can you increase your finances?
To spend less than you make you can either spend a bit less than you currently do, or spend the same and earn more. Where so you start with this? Firstly look at your current employment. Have you had a pay rise recently? Do you feel you deserve one? Are you getting paid what you deserve?
Your own job is the first place to look. Check out New Zealand Department of Labour in the resources below for information on pay rates. If you feel you deserve more money, does some research on asking for a pay rise and go ahead and do it. You will be surprised with the results. Remember if you don’t ask, you don’t get.
Other ways to increase you income is to work more. Obviously this will not suit everyone, however a lot of people do a weekend job to earn a bit more cash. This not only earns you more money it also stops you spending as much as you are busy working. Of course a better way to earn more money is to invest. If you need more cash flow you will need to look for low growth high yield investment. Things like blue chip shares with dividends work well here. Of course you need the money to invest to start with but sometimes borrowing can work here.
Having a savings account is very important. The best way to do this is to pay you first – before any other bill is paid. Understandably, there are times in life when it’s difficult to save; however, just putting $25 per payday aside for savings will add-up over time.
To avoid surprise deductions from your savings account, access your account online at least once a month. Scroll back through the previous month and make note of all the recurring automatic deductions from your account. Go ahead and deduct those in your check ledger now – even if it puts you in a negative balance. The money won’t be gone until the debit is posted, but you will know not to spend money on unnecessary items until you have built up enough of a balance to cover your recurring automatic debits.
How can you reduce your expenses?
Firstly reducing your standards can greatly reduce your expenses. This sounds harsh but just going for a less expensive bread and milk will help. Not buying brand name clothes or going through your old wardrobe and renewing old clothes instead of buying new ones. There are loads of ways to cut cost.
Reducing your repayments on credit cards is also a good way to reduce expenses. Every time, you think about paying with credit ask yourself, do I really need this? Can I pay cash? Take the time to calculate what you will ultimately pay for that convenience in the long run. Credit cards typically have Interest rates of around 20% while some quick. It is far better to go without in the short-term than to cripple yourself financially in the long-term.
debt consolidation is also an option. You can take out one huge loan to cover all your small loans of higher interest. This will reduce you interest and make it easier to manage you payment.
By now, you have realized that having a more successful, more relaxed, more enjoyable financial future is well within reach. As a matter of fact, it all depends on you! Are you willing to put proven strategies into practice for greater security, comfort, and freedom and less worry and anxiety?
RESOURCES
How to ask for a pay rise
New Zealand Department of Labour
Reserve Bank of New Zealand
Financial Markets Authority
New Zealand Independent Money Guide
Simple Savings
One Response to “Learn How to Manage Your Personal Finances”
Leave a Reply
I did it. I went to my boss and asked for a pay raise. I had to take on a bit more work from other departments but it is great. It breaks my day up a bit and I am learning new things too. The extra pay is great.