No matter what your financial situation is at the moment, you could use a boost or at least some fine-tuning to get yourself to the next level. Each of us is at a different stage in their journey towards financial freedom and solutions should be adjusted accordingly.
We offer first some tips for those just starting to get acquainted with personal finances. Next, we will address those who hit a few bumps in the road and want to get back on course. Finally, we share a few insights with those who are on top of their game and need to get better.
The Youthful
When you are just starting out your journey into the finance world, it pays off to do some research and learn about your options. Financial education is the cornerstone of future wealth. Before you sign up for your first credit card or even student loan, you should know the basics of debt, interest and credit scores.
Even if your parents have given you some notions about budgets, saving, and being thrifty, the rules of contemporary banking and lending are changing rapidly, and you need to be informed. A great resource is AAACreditGuide.com, not only a central repository for hand-picked lenders but a comprehensive library of personal finance articles. Take your time to read at least one article per day as a way to become financially literate and stay away from possible pitfalls.
The Bad
Engaging in reckless financial behavior is not always a choice, sometimes life happens too fast to stick to a budget. However, the outcomes are most of the times damaging for a long time, up to seven years. Once you enter the whirlwind of bad credit, the effects are devastating. For example, you are denied in personal loans and new credit lines, or you are offered some at very high interest rates (30-36%). In this situation, the best decision is to restrain from getting into more debt and working towards building your credit until you reach a better score.
If you desperately need the money, you could strive to get a loan from a lender specializing in clients with bad credit. Check out the reviews of NetCredit.com to help you get an idea what are the best terms you can expect in this situation. Although a small interest rate is out of the question, they are genuinely interested in helping their clients grow and learn more about personal finance. Stay away from lenders who apply origination or management fees. Your APR should cover all expenses and risks.
The Good
If you already have a good salary, can make your payments on time and you can afford all your credit cards, maybe it’s time to think about the future. And by future we mean retirement. You might already have a 401 (k) from your employer and matching that, congratulations, you are not leaving any free money on the table. However, you can supplement that through an IRA, either traditional (tax-deductible) or Roth (after-tax). Why not save up to $5,500 (until age 50), or even up to $6500 (until age 70 ½)?
Make sure you take time to research what is the best option for you, as this is a long-term commitment and you could be overwhelmed by choices. The criteria to take into consideration are the level of fees, the account minimums and the fees you have to pay if you decide to end the contract or convert the account. Some top IRA accounts offer you robo-advisors and even human experts ready to explain you all the insights of saving.
Do you have other tips we should include? Let us know in the comments.
