Has anyone ever tried to buy a gift for a family member or pay for dinner with a sweet date, but the credit card was declined? Is there always never enough pocket change for that desirable snack? Money is an important value since we as people need it to buy a house, clothes, and other necessities. Although there are people who are unaware of where their money is spent or no knowledge of saving it. However, creating a budget by planning, having good credit, and talking with an advisor will help in having money in the bank and the pocket.
People with the lack of knowledge of their own finances can lead to overspending, and little money in the one’s bank for important things such as large payments, emergencies, or future retirement. Sadly, we as human beings love to spend on things we don’t need and lose track of where our money goes in which we find ourselves in a financial situation. For example, behind on bills which can lead to debt or bankruptcy. Effectively, people could lose or unable to buy a car, house, phone, etc. One is not able to pay what they need or want. On the contrary, there is a solution for this financial problem: making a budget.
Creating a budget will help in keep track of all one’s income and expenses to monitor how much money can be spent or saved for essential possessions. For this reason to “ended[ing] up just where they want to be” which is a comfortable life of “a new home, sitting atop a comfortable savings cushion or taking an exotic vacation”(Clark and Goldwasser 74). A person is able to meet the goals one strives to achieve when establishing a budget. There are few worries and more opportunities in investing one’s money in to take that next step in the economic ladder. First key factor into creating a budget is to write a list.
127 our experts are availableright now
Write a list of all one’s sources of income and expenses. Dennis Kroener, a CPA and personal financial specialist explains, “most people don’t do that pencil-and-paper exercise and guess what they’re spending their money on”(“The Art” 77). This is important because it will help people to organize what expenses they have to keep track and not fall behind on payments.
Falling behind on payments could lead to the inability of paying for entertainment or other things, and increases stress. With this in mind, a person start a “money diet” in which Gial Perry-Mason, first vice president of investments with First of Michigan explains as getting rid of trivial expenses and finding “cheaper alternatives”(“The Art” 78). There are other items or services that are less expensive, but do similar, or the same functions that can help save money. Equally important to having a list is to have good credit.
For a budget that shapes one’s wants and need, having good credit certainly aids in buying a house or a car. For instance, Steve Rhode, president and co-founder of Debt Counselors in Maryland emphasizes “pay[ing] their bills on time and pay[ing] them early” is key on having good credit (“The Art” 78). Pay bills in a timely matter lets banks and other service providers know that they can trust you with their money or other items.
Therefore, providing lower interest rates for that individual. If payments on credit card bill or a loan are late, then the bank will increase the interest rate due to the late payments which more money is owed to the bank. Consequently, it will take even longer to pay off leading into a hole of debt. Furthermore, when unsure about one’s credit or other finances, it is substantial to get help.
Talking with financial advisor benefits in obtaining information in how to save money in one’s budget. Financial advisors can assist in getting a better deal on loans, and be able to possibly “[pay] more than the minimum on the loans with the smallest balances”(Clark and Goldwasser 74). In doing so, one can pay off debts quickly without losing an excessive amount of money.
Also a tax advisor give help “what deductions you’re entitled to”, or an accountant can give guidance on “deduct[ing] the cost of certain professional trips and adjust how much you’re contributing to your retirement plan”(“The Art” 78). This will ensure that a person is not overspending on taxes as well as getting the most out of one’s money. There are enough savings left for investing in retirement to have a secure, comfortable living.
Overall, writing a list of income and expenses, having good credit, and getting advice from a financial counselor benefits those who don’t know where to start. There are numerous sources of information about one can do with one’s money, and many services that provide it. It can be overwhelming, but as long as one starts with a simple plan, then gradually it will become an enriching journey. One has a comfort of knowing that their future is secured.
