What is personal finance?
Personal finance is knowledge related to the management of money, savings and investment of an individual or family. It includes budgeting for monthly and yearly expenses, banking, insurance, mortgages, investments, retirement planning, tax planning and property planning.
It covers the entire sector that provides financial advice and services to individuals and families and advises them about opportunities for investment and savings.
Personal finance is about the achievement of your personal financial goals, whether it be meeting expenses for next few months or long term requirements such as a retirement fund, saving for children's education or medical emergencies.
It all depends on your income versus your expenses and standard of living. It is related to your individual goals and desires and seeks to establish a plan to meet those needs within your financial limits. However, to increase your savings from your income and to recognize investment opportunities it is important to learn financial skills which allow you to take informed decisions.
What are personal finance blogs about?
Blogs or discussion websites have been around as long as the internet. There are several highly reputed & best personal finance blogs. These blogs render useful service to their readers by providing up to date news and information about various financial trends, information and news of stock markets. One of the most important tasks that these blogs do is to provide good advice on how to get out of debt. People get into debt for various reasons. Usually it is because they have been living beyond their means or since they faced an emergency and did not have sufficient funds to cope. Debt is very expensive. Regardless of the reason for which debt has been incurred one must always try and pay it off as quickly as possible. Short term unsecured personal loans carry massive interest burden. Longer term large loans such as those utilized for education take several years and sometimes more than a decade to pay off.
Strategies to get out of debt from personal finance blogs
Laymen often lack the expertise to handle their finances. It is expensive to employ the services of a financial planner and it is here that personal finance blogs render useful help. Debt management is a complex topic with many different aspects. Personal finance blogs dispense valuable suggestion to their readers on how to get rid of debt quickly and efficiently.
Make every dollar count:
Write down a detailed budget and do not deviate from it. Set aside every extra cent to paying back your debt. Do not spend on unnecessary things such as buying a new pair of sneakers you do not need or eating over priced popcorn at movies. That does not mean you should not indulge yourself at times. But the key is to do so occasionally. Whenever you are tempted the important task is to pay back your debt as quickly as possible.
Work a second job:
Reducing your expenses is a great strategy but there is only so much that it can produce by way of savings. What you probably need is to ramp up your income. The easiest way to do it is take up a second job – not as demanding as your primary occupation but which pays little something every month towards paying off that debt. You could freelance online or work as a cashier at a small business like a car wash during evening and weekends. The long hours of work would be exhausting but at least you would be paying off your debt.
Avoid becoming a big spender:
You are not your clothes or your house or your car. Do not judge yourself based on your possessions. A new $400 dress you do not need is not going to change you into a new person. There will be a feeling thrill when you buy it and then an emotional vacuum and the guilt of having spent more than one can afford. Shopping without planning is not something anyone should indulge in. Marketing is aimed at our impulsiveness. Everything is arranged so that we rush in and buy. But buying things never increases our self worth or make us into a better person. Impulse buying is one of the main reasons people get into debt and stay in debt.
Organize your debts:
Create a list of your debts using a piece of paper or a spreadsheet. Mention the tenure, amount and interest rate. Select the one which is short term or the smallest amount. Focus all your attention on paying it off first while paying minimum for the rest. When the smallest one has been paid off you have more money to use for debt repayment. Try paying off the second smallest one first. This method called laddering works very well for most people. Very obviously not only do you have to try and pay off the smallest debt first but also the highest interest debt which is usually card debt.
Sell off what you do not need:
Do you have two cars but can survive with one? Why keep the other one? Not only is its depreciation costing you but also insurance and periodic maintenance. Sell it off and use the money to repay a debt. This applies to all your other assets – from an ottoman you do not use you do not use to a motorcycle to a second home. Get rid of what is not essential and use the money ro reduce your debt.
Say goodbye to cafes:
Your morning caffeine fix can be expensive. Average cost in Starbucks is about $2.80. Cost of brewing a cup at home is 85 cents. At 14 cups a week that is well over $1000 over period of a year. Brewing your own coffee is going to save you a lot.
We are all used to gym memberships, online streaming services, cable, changing our phones every 20 months. But you do not need any of these. Jogging can replace your gym, instead of watching the latest Netflix release visit a library and pick up a book, instead of buying a new phone every 20 months buy a slightly outdated model at a discount every 36 months.