In order to improve the state of your finances, continue reading to discover 7 effective financial tips, which will help you take control of your finances!
7 Financial tips you never knew you needed:
1. Pay off your debt smartly
If you have debt such as loans or credit card repayments, it’s a wise idea to pay off your debt in order of interest rate. As an example, if one of your loans features a high-interest rate, make sure to pay it off in full, before you start paying off loans with lower interest rates.
For instance, if you have a student loan which offers 0% interest or a low fixed rate interest rate, there’s no point rushing to pay off this particular debt, until you clear some of your debts which have higher interest rates.
2. Be aware of your net worth and focus on increasing it over time
Your net worth is the sum of your assets minus the sum of your debt. While many individuals are unaware of their current net worth, it’s well worth keeping tabs on yours, so that you’ll be able to track your net worth over time.
To start increasing your net worth, focus on getting rid of your debts and increasing your assets. Some examples of assets include cash, shares, and property.
3. Budget 20% of your monthly budget to increasing your net worth
Consider making a decision to budget 20% of your monthly budget to increasing your net worth. That means that each month you should either work on decreasing your debt or save money or invest money, in order to increase your net worth.
4. Don’t be afraid to ask your company for a raise
If you work for a company, make sure that you know how much your time is worth. If you believe that you have far too much experience and talent to be paid a certain rate, it’s well worth considering negotiating for a raise.
If you don’t get the raise which you know you deserve, then you may want to consider job hunting for a position which will pay you what you’re worth.
5. Never co-sign for another individual’s loan
Never make the mistake of co-signing for another individual such as your spouse or child’s loan. As if they are unable to make their loan repayments, you may be held responsible for the outstanding money left on their loan. Which could leave you in a rather unfair, challenging financial position.
6. Don’t rely on material objects to make you happier
If you have a tendency to shop in order to boost your mood, it may be time to work on decreasing your dependency on shopping. After all, science shows that individuals are actually happier if they spend money on memorable experiences rather than on luxury goods such as fancy electronics or fast fashion.
7. Don’t touch the funds held in your retirement account
If you try to take money out of a government-run retirement account before you reach retirement age, you’ll incur harsh financial penalties!
If you commit all the financial tips listed above to your memory, you’ll be sure to increase your savings and your net worth!