Millions of Americans struggle financially - living paycheck-to-paycheck. However, even if you feel like you have a hard time making ends meat, you can take steps to improve your personal finances. Here are some important tips that can bring you greater financial security.
One of the biggest personal finance mistakes that consumers make is using their credit card(s) to finance their lifestyle. Unfortunately, credit card debt is one of your biggest enemies of financial security. Not only can you end up deep in debt, but you can end up paying a fortune on credit card interest in most cases. Therefore, you should try to avoid accumulating too much credit card debt. In fact, you should make a serious effort at paying off your credit card balance in full each month. That way you can avoid paying any interest.
Most consumers tend to overspend - especially on things that they can live without. For example, you can live without several pairs of high-end name brand shoes. You can live without an expensive cable/satellite television package. If your budget is tight, you need to take a look at the things you are buying that you really can't afford (and don't need), then stop wasting money on them.
True financial security is about having peace of mind, knowing that you have enough money to cover an unexpected emergency. For example, if you lost your job, you would need to have enough money to pay your bills until you could find a new job. While many personal finance experts recommend saving enough money to cover six months of expenses, for better financial security, you should shoot for a year. That's because it can take a long time for some people to find another job - especially if there are a lot of other people unemployed as well.
There are certain times when paying in cash can have its advantages. For example, you can sometimes negotiate with merchants when you pay in cash. Let's say that you want to take salsa dance lessons. If the lessons normally cost $50 per class, you could tell the instructor that you have $40 cash on you. There's actually a good chance that the instructor will accept your lower offer, as most merchants are eager for your business.
When you do have to buy things, you can often save money buying in bulk. For example, many sellers on Amazon and other e-commerce sites offer great deals to customers who buy in larger quantities. Oftentimes, you will save 20 to 40 percent off the original price per item. Just take some time to do your research and shop around a bit before buying.
In short, financial security isn't about getting lucky and picking a great investment. It's actually about taking a disciplined approach to your personal finances. Avoid overspending and getting too deep into debt. Make sure you have enough savings to cover potential emergencies. Don't be afraid to negotiate a bit with merchants - especially when you are paying with cash. Lastly, look for deals that offer big savings when buying products in larger quantities.