Everybody can benefit from some advice every now and then. It doesn’t matter how much you may think you know about a subject, there’s always room to learn something new. This is especially true when it comes to finances. There’s no one tried-and-true way to manage your money— it really all depends on your circumstances and where you are in life. However, despite how much you make, where you are in your career, or what your family size is, there are a few valuable pieces of financial advice that everyone can benefit from learning.
Know Your Score
Everyone should know their credit score. Some credit card companies are making it easier for people to see their score each month by offering it as a feature, but many people are still unaware of what shape their credit is in and it’s costing them when they want to make large purchases such as a home. You can access your credit report for free once a year, which will provide detailed information about your finances. Checking your credit report can also help you spot and address discrepancies which can raise your score.
Be a Smart Saver
Having an emergency savings fund can save you and your family dearly if the unexpected comes up. You should strive to put away at least six months of your salary away to cover living expenses. If that seems like a lot, start small and let your money build up over time. You can build savings right into your monthly budget to ensure you put enough away. You may be tempted, but don’t dip into your savings unless it’s a true emergency, such as a home repair, medical necessity, or you’ve lost your job.
Set a Budget
Everybody should have a budget. It doesn’t have to be elaborate. Something as simple as a spreadsheet that tracks your monthly income and expenditures while accounting for putting away at least 20% into savings is a great start to keeping your finances on track. You may also want to set yourself reminders to pay bills, such as taxes, that don’t occur regularly but are still important to include in your overall budget.
Upgrade your Vehicle
If you find that your vehicle is spending more time in the shop than on the road and more of your budget seems to keep going towards repairs, then it may be time for an upgrade. Investing in a reliable vehicle can actually help your budget by cutting out unnecessary repairs and money lost from missing work. You can find a guide for applying for auto loans to help you through the car-buying process and make your life easier.
Think Before you Co-sign
Before you sign your name on the dotted line of a loan for a family member or friend, consider why they need a loan in the first place. If it’s because they’ve been irresponsible with their finances, you may end up hurting your credit score in the long run by helping them out. Instead of co-signing for loans, offer to help them enroll in credit counseling classes, which help them learn how to manage their finances and may get their credit score back on track so they can get a loan on their own.
Don’t Buy More Home than you can Afford
Most banks will approve you for a larger mortgage than you need, but that doesn’t mean you need to run out and get the biggest, most expensive house you can find. Instead, think practically. If you’re not planning on having a large family, for example, you probably don’t need to purchase that five bedroom, four bath home that just hit the market. The more practical you are with your home purchase, the better for your bottom line and the sooner you can get it paid off.
Leave Your Retirement
Your retirement savings is there to help you pay your monthly bills when you’re no longer working. While it may be tempting to dip into your retirement every now and then or use it as a backup savings plan, you should resist the urge to cash in only our retirement account unless in an absolute dire emergency. Cashing in your money early often comes with hefty penalties, and that money you’ve worked so hard to put away will be gone forever.
Wherever you are in life, these pieces of financial advice can be beneficial to your overall financial well being. Take them into consideration next time you have a question about how to make the most of your money.