personal finance Archives | Page 9 of 40

7 Financial Commandments for Your Thirties

Hitting your thirties signify that you are halfway to retirement. After establishing a financial foundation in your twenties, it is up to you to use the following decade of your life to build and protect your wealth.

Whether you want to purchase a flat or to travel the world, these seven financial commandments can help you stretch your dollar.

#1: YOU SHALL LEARN SELF-CONTROL

Throughout your childhood, your parents or teachers taught you to practice self-control. The sooner you learn the importance of delayed gratification, the better off you will be. Applying self-control makes it easier to stay on top of your finances.

Select consciously spending cash rather than swiping your credit cards. Credit cards are convenient, but you must pay your bills on tip to maintain a good credit score. Do you really want to pay interest on a pair of jeans or a box of cereal? Think about it.

#2: YOU SHALL GET YOUR INSURANCE IN ORDER

Let us face it! You are not getting any younger. You need to sort out your health insurance, life insurance, and other policies. Considering a life insurance is prudent, especially if you have people depending on you.

#3: KEEP ADVANCING IN YOUR CAREER PATH

Developing your skill set occurs in your twenties. In your thirties, you will need to apply these skills to increase your earnings. Start by researching potential career paths and identifying companies where you can fit in. If you have the resources, you can go back to school to further your studies. Alternatively, you can take free online courses to boost your career.

#4: YOU SHALL INCREASE YOUR EMERGENCY FUND

The pandemic highlighted the importance of keeping an emergency fund. Having an emergency fund can help cushion the financial blow of unexpected events. If you started an emergency fund in your twenties, you followed the standard rule of keeping at least six months’ worth of your expenses.

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As your income increases in your thirties, you should also boost the balance in your emergency fund and take your family in consideration. Make it a habit to save money and to pay yourself first!

#5: HONOR YOUR PAYCHECK

Stop spending your entire paycheck in less than a month! Live within your means and do your best to save a portion of your paycheck to propel your future. Gradually increase the amount you save while decreasing the amount from which you live off.

Use the 60-80% of your income to fulfill your needs and allocate the remaining 20-40% of it to your savings and investments. Transferring the money automatically to your savings ensures that you will not be tempted to use it.

#6: YOU SHALL WRITE YOUR WILL

Do you still think that you are invincible? Try waking up in your thirties after a night of heavy partying! Protect the people you love by writing a will. Without one, others will have the power to decide how to split up your estate and how to raise your children.

#7: YOU SHALL NOT COVET THEY NEIGHBOR’S THINGS

As you reach your thirties, you may find yourself in a place where you tend to compare your accomplishments to your peers. Scrolling through your feed can highlight the milestones that your friends have reached such as purchasing a flat or getting married. You can admire your neighbors’ new car or new job. However, you do not need to stretch your budget to keep up with them. Doing so will ruin your finances.

Focus on your financial goals, live within your means, increase your savings, and do your best to be content. Acknowledge your inner strengths and use it to succeed!

Sources: 1 & 2

6 Savvy Financial Tips for Young Adults

Managing finances can be challenging, especially when you are navigating through different conflicts such as budgeting with an entry-level salary or carrying a hefty student loan debt.

Focusing on the fundamental financial strategies will enable you to strengthen your financial position. Work towards achieving your goals and financial success with these savvy tips.

#1: ESTABLISH YOUR EMERGENCY FUND

The importance of building an emergency fund has been the subject of many financial articles. After all, it is one of the most vital financial tasks that you can accomplish as a young adult. An emergency fund is a pool of money that you can earmark for unforeseen expenses.

When unexpected life events occur, the emergency fund acts as a cushion for your finances. For instance, you can use your emergency fund to pay for expenses that come with sudden job loss or appliance breakdown. The amount that you will save depends on the stability of your job, the debts you have, and your income. Experts recommend saving about six months’ worth of living expenses. You can allot at least 2% of every paycheck to accumulate this amount.

#2: GET BASIC HEALTH AND LIFE INSURANCE

Financial literacy involves understanding how to prevent and manage financial issues as they arise. To help you deal with unexpected expenses, you may get yourself insured. Educate yourself about the different insurance products available on the market right now.

Get yourself insured while your premiums are low (i.e., mainly due to your age). If you have dependents, consider getting term insurance to protect them in the event that you become permanently disabled or you pass away.

#3: KNOW WHERE YOUR MONEY GOES

Stay on top of your budget plan by knowing where your money goes. Ensure that your expenses do not exceed your income. As you may be earning with a starting salary, keeping your recurring monthly expenses low can save you significant money over time.

Once you see how the cost of your morning coffee or take-away dinner adds up, you will realize that making small changes to your daily expenses can have a big impact on your financial situation.

#4: PAY OFF THE CREDIT CARD BALANCES

Searching for the lowest interest rates when comparing loan terms can help you save a substantial amount of money over time. You can pay off your credit card balances each month, so you do not get trapped by the interest charges. You can look for a credible expert such as a credit counselor if necessary.

#5: MAKE INFORMED FINANCIAL DECISIONS

Examine your personal needs and goals. Make informed financial decisions by studying the potential outcomes of your options. There are trade-offs between your short-term and long-term goals. For instance, purchasing a car can impact your savings for retirement.

Therefore, you must invest in items that will improve your earning abilities. You can invest in a good suit, an educational advancement, and a set of electronic devices to help you in your job hunting.

#6: LEARN SELF-CONTROL

As a young adult, learning the art of delayed gratification is easier said than done. However, personal finances are easier to manage when you have self-control.

Effortlessly purchasing an item on credit is possible, but the best step is to wait until you have saved up enough money for your purchase. Do you really want to pay interest on a pair of designer shoes?

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Please do not carry more cards than you can keep track of. This savvy tip is crucial for creating a healthy credit history.

Sources: 1 & 2

6 Money Lessons To Avoid Being Broke

Nobody ever wakes up one morning and thinks, “I want to be broke.” A hefty loan here, a bad investment there, and a long credit card statement later – you have no idea how you landed in this state. You are living paycheck to paycheck without savings intact.

What can you do to turn the tide? Start by reading this article and applying these lessons into your life.

#1: THE POWER OF SETTING CLEAR FINANCIAL GOALS

Goals mark your direction in life. If you do not have a clear destination to work towards, it can be difficult to find the passion or motivation to save. Whether you are eyeing on purchasing a flat or figuring out how to pay off your debts, crafting a plan can get you there.

As you set your financial goals, consider making them SMART. Financial goals need to be specific, measurable, attainable, realistic, and time bound. Creating goals using the SMART method can help you ensure that you are working on an achievable goal within the timeline that you set. Stay on course!

#2: DON’T BUY WHAT YOU CAN’T AFFORD

Spending less than you make and buying what you can afford seem like simple personal finance rules. However, these are easier said than done. You can get distracted with the consumer-driven society that tempts you to live beyond your means. When this happens, a good rule of thumb is to save at least 15% of your income.

If you find it hard to save money, try paying for groceries and clothes with cash instead of a credit card. Take it one step further by using a budget per month. Withdrawing a fixed amount every month can help you to become more aware of your spending choices.

#3: EMBRACE THE FINANCIAL WORLD

The majority of personal finance lessons do not center around financial education, but on financial behavior. If you can modify your behavior with money, you can alter your financial future. Remember that you do not need to be a financial expert to prepare an emergency fund or to save for retirement. Start by building a solid financial plan and committing to it.

#4: THE IMPORTANCE OF INCREASING YOUR INCOME

Search for part-time jobs such as freelancing or dog walking to grow your income. You can take on other positions in the same company too. If you feel like you have reached the glass ceiling in your field, consider looking for new career paths to generate more income. Increasing your income can help your financial future.

#5: INVEST SMARTLY, AND NOT IMPULSIVELY

Investing is a good way to protect and grow your assets. However, the talent of wise investing does not come to us all. You may be succumbing to emotions and invest impulsively, hence you win big or lose big.

As a precaution, have an advisor who is trustworthy and credible. Research on your part is vital as well. It will give you the knowledge and confidence you need to make smart investments.

#6: BUDGET YOUR MONEY

It is understood that budgeting plays an essential role in controlling your spending, paying off debts, and staying on track with your financial goals. Creating a budget starts with adding up all your expenses for the month and subtracting that amount from your total income.

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Set monthly and daily spending limits to adjust and make up for any oversights. You can create a budget using a notebook, a spreadsheet, or a budgeting app. Use a tool with which you are most comfortable.

Sources: 1 & 2

Make A Personal Budget In 6 Easy Steps

A personal budget is a financial summary that tracks your income and expenses for a certain period, which is typically a month. The word “budget” is often associated with limited spending, but a budget does not have to be restrictive to be effective.

Having a personal budget that you can review on a regular basis enables you to prevent overspending. Start with these six simple steps.

#1: GATHER ALL YOUR FINANCIAL STATEMENTS

Get a bird’s-eye view of your financial situation by gathering all your financial statements. Include your bank statements, investment accounts, recent utility bills, credit card statements, receipts from the previous months, loan statements, and other receipts. The more information you can retrieve, the better.

#2: DETERMINE YOUR MONTHLY INCOME

Determine how much you make in a month. If you have a fixed salary, you will find information in your pay slip. If you get paid bi-monthly, you simply need to multiply your pay slip into two.

If you have more than one job or you are self-employed, you must determine your net income differently. Calculate your net income by examining your two most recently filed tax accounts. Add the two figures of your net profit together. Then, divide the total by twenty-four. The definitive answer is your average monthly income.

#3: CREATE A LIST OF YOUR MONTHLY EXPENSES

There are two types of monthly expenses – fixed and variable expenses. Fixed expenses are expenses that you encounter every month such as rent, car payments, and utility bills. While variable expenses change from month to month. Variable expenses include groceries, gifts, and shopping.

Write down a list of all the expenses you expect to have during a month. Do not forget about the childcare, transportation, and entertainment costs.

#4: TOTAL YOUR MONTHLY INCOME AND EXPENSES

Get the total of your monthly income and monthly expenses. If your income is higher than your expenses, you are off to a good start. You will have extra funds that you can put aside for retirement savings or debt repayments.

If your expenses are higher than your income, you need to make some changes. Find out which categories you are overspending on.

#5: EVALUATE YOUR SPENDING HABITS

Add up your total spending per expense category. Which category do you overspend on? You can get the percentages per category to understand how much of your income is going where.

#6: MAKE NECESSARY ADJUSTMENTS

After covering steps one to five, you will be able to highlight the spending areas that you need to eliminate or reduce. For instance, you can cancel your gym membership or lower your handphone’s postpaid plan.

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Amend your budget and align these changes to your financial goals.

Sources: 1 & 2

Your Concise Guide To Cryptocurrency Terms

DEFINING CRYPTOCURRENCY

The cryptocurrency is a virtual or digital currency that is secured by cryptography, which makes it nearly impossible to double-spend or counterfeit. Many cryptocurrencies are decentralized networks based on blockchain technology. This technology consists of a distributed ledger enforced by a disparate network of computers. A distinct feature of cryptocurrencies is that they are generally not issued by any central authority. Thus, these are theoretically immune to government manipulation or interference.

1. ADDRESS

Cryptocurrency coins are identified on the blockchain using the unique addresses. The value of your wallet is updated based on your address every time a transaction is confirmed. Addresses may appear in diverse formats. Simply put, no coin is stored without a proper wallet address.

2. BITCOIN

Bitcoin is a term you usually hear. It is a digital currency that came into circulation last 2009. Around 18.636 million Bitcoins have been mined and there are only 21 million currently in existence. These can be traded anonymously or sold for cash. It is important to note that the circulation is not controlled by banks or governments.

While Bitcoin is the most popular, there are other cryptocurrencies in circulation such as Cardano, Litecoin, Ethereum, Ripple, and Dogecoin.

3. BLOCKCHAIN

The blockchain is the underlying technology that powers the cryptocurrencies. It is a database that is chained togethering using cryptography. Once data is entered into this ledger, it cannot be erased or altered. All transactions are permanently recorded too.

4. EXCHANGE

The digital currency exchange is a business that allows users to sell, trade, buy, and exchange their Bitcoins for cash or other cryptocurrencies. Exchanges are usually run by private companies that earn by getting a commission from the transactions.

5. MINING

Like precious gold, there is a finite number of Bitcoins that can be acquired when you purchase or mine it. To mine it, miners use computers to solve complicated Mathematical puzzles. The miners receive Bitcoins as a reward for solving the puzzles. Mining requires powerful machines and unwavering amounts of time and energy.

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6. PRIVATE KEY

The private key is necessary to verify transactions when withdrawing or selling your cryptocurrencies. If someone gains access your private key, you can lose all your funds in a matter of seconds. You should not share this string of numbers and letters to anyone!

7. PUBLIC KEY

The public key is a string of characters used to buy cryptocurrency. Fans can easily send cryptocurrency using the creator’s public key.

8. SATOSHI NAKAMOTO

Satoshi Nakamoto is the individual or group of individuals credited with founding the world’s first cryptocurrency – the Bitcoin. The founder remains completely anonymous. If you see the term “satoshis” thrown in conversations, it refers to a fractional unit of Bitcoin. You can transact with the satoshis.

9. SEED

Seed is the foundation of your wallet’s digital existence. A recovery seed is a series of twelve or sixteen words that can be used to access your wallet in case something goes wrong. It is the equivalent of asking twelve security questions for a forgotten password. Do not share this to anyone!

10. WALLET

A wallet keeps a record of the user’s balance. It enables you to receive and send digital currencies. A crypto wallet is either a hardware device or a program that can access the computer software.

Sources: 1, 2, & 3

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