Six Personal Finance Tips
Good personal finance habits are essential to wealth building and financial security, not only in good times, but also challenging times.

A good money foundation helps maintain that confidence. But what is possible and makes sense in a financial plan will likely differ from individual to individual. Still, there are basic guidelines and principles that are beneficial for most people.

They include:

1. Keeping to a budget
2. Paying bills on time
3. Saving consistently
4. Managing debt
5. Having adequate protection
6. Using professionals

It’s important to know the particulars of each area and how they possibly relate to your own circumstances.

1. Have a budget
The first is, simply, to have a budget: a running account of what you are making, spending, and keeping over time. Many people don’t.
Having a budget may help enforce financial discipline. As paychecks grow with time and circumstances become more comfortable, many people and families allow their spending to grow as well.
A budget is a reminder about priorities and goals. Typically people with household budgets, including an emergency fund, are somewhat more likely than those without to be spending less than their income.

2. Pay bills on time
Being late on bills results in late fees, damaged credit reports, or even legal trouble.
Being on time may result in a better credit rating, which generally makes it easier to get mortgages and loans.

3. Have a savings plan
The importance of savings is obvious ― as you age, life will throw unexpected expenses your way. Research indicates that many people fall short in terms of savings.
If you find yourself in such a situation, establishing an emergency fund should probably be the first order of business.

Beyond that is having a plan for retirement. That may include utilizing retirement plans that may be available through an employer, which often offer additional matching funds, as well as individual savings and investments. It’s never too late to start saving.

In determining your savings plans, also remember to guard against inflation and be mindful of taxes.

4. Avoid high-interest debt
In 2022, those households that reported carrying debt have an average credit card balance in excess of $5,000 .

While some types of debt are positive in the long run, mortgages for instance, debt that carries high interest rates, like credit cards, tends to eat away at personal finances.

5. Have protection measures in place
It’s not enough to build wealth and financial security. Once you have it, you need to protect it. That’s where insurance comes into play.

Health insurance, along with insurance for property like your car and home, are protection measures often taken for granted and, in fact, required by law to some extent.
Life insurance may help maintain financial security and stability for your family should something happen to you.

Disability income insurance should also be considered as a way to help provide income should you become too sick or injured to work.

6. Use professional help
Money matters today can get complicated, especially for those who, perhaps using the suggestions above, have built wealth and started accumulating assets.

Rules and laws governing finances ― from taxes to loans to college savings ― can change quickly. It’s wise to consider working with a financial professional to obtain guidance and investment management that’s up to date and aligned to your goals.

These are simple and, to some, probably the most basic steps. And, as noted earlier, their importance and applicability may differ from person to person. But for most people, it’s the philosophy behind the actual financial steps that are important ― the motivation to make oneself financially secure.

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