10 Strategies to Master Your Finances

10 Strategies to Master Your Finances

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Whether it is too much debt, damaged credit, lack of savings, or not having enough income, financial challenges can be very stressful and discouraging. It is critical to your success strategy to focus on building a firm financial foundation to support your goals. In fact, it is a strong foundation in every area of your life that empowers you to build the life you truly want more easily.

Ask yourself, “What are the three worst financial choices I have made in the past?” and “How could I avoid making similar choices in the future?” It is easy to beat yourself up for mistakes, but a better approach is to simply acknowledge poor choices and seek to make healthier choices starting today. Here are 10 smart choices that will help you create a stronger financial foundation, less financial stress, and the freedom to enjoy your life more fully:

  1. Identify past choices that have led to financial frustration or stress, and stop making those choices, starting today.
    One of the most important choices you can make with your money is to learn from your past choices. Use failure and frustration as a learning tool for future success.
  2. Pay off credit cards before other debt.
    High balances on revolving debt, such as credit card debt, negatively impact your credit score more than loans that are scheduled to be paid off in a set number of months or years such as a car loan, student loan, or mortgage. One of the fastest ways to improve your credit is to pay down or pay off your credit cards.
  3. Stop using your credit cards unless you can trust yourself to pay them in full each month.
    The average American household carries more than $8,000 in credit card debt with no hope of paying it off in the next 60 days, according to the most recent statistics. Make a decision to live within your means, using the money you have rather than money you have to borrow.
  4. Change your lifestyle if necessary.
    Sometimes building a strong financial foundation requires sacrifice. If you need to “downsize” your lifestyle so that you can become more financially strong, do it! When you have a purpose and vision, and understand the importance of a firm financial foundation, it is empowering to make tough choices such as keeping your old car for a while longer, waiting to buy a bigger house, or curbing the shopping sprees while you save to buy your own home.
  5. Get insurance (health, life, home or renters, auto, and disability) that you feel confident will meet your needs in the event you need to use it.
    No one ever expects a crisis, but it is comforting to know that in the event of one, your finances won’t be completely destroyed. An illness, fire, or accident is stressful enough. Make sure you are covered in the event of unfortunate circumstances.
  6. Establish a financial cushion of six to 12 months of expenses.
    Make this a priority goal and begin saving toward it, even if it takes you five years or more to reach your goal. Knowing that financial ruin is not a couple of paychecks away is a very empowering feeling. It will often keep you from making decisions out of fear and empower you to make decisions based on your purpose and vision.
  7. Invest time in your own financial education.
    One of the main causes of financial problems is what I call “financial illiteracy.” Some companies make a great deal of money off of the financial ignorance of otherwise intelligent people. Spend two hours or more per month learning about wealth building, debt elimination, investing, and real estate. Read books or articles. Attend a seminar. Learn from those who handle their money well. The more financially literate you become, the better off you will be.
  8. Refuse to be an emotional spender.
    Have you ever spent money on your children out of guilt? Or in an effort to win the affection or admiration of others? Do you shop when you are feeling down? Do you buy things you can’t afford because they make you feel better about yourself? Have you co-signed on credit cards or loans, even though your intuition told you not to? If so, you have engaged in “emotional spending,” an expensive habit. Recognize your propensity to spend emotionally and make a decision to change your behavior. Wait 72 hours before making a decision about an impulse purchase. Question your motives before spending money. And make sure you spend your money in a way that reflects your vision and purpose.
  9. Have a vision. Set goals!
    Last week, I challenged you to create a vision for the five key areas of your life. One of those areas is your finances. One of the reasons it is important to have a vision is because it serves as a reference point for where you are headed. When you are building toward something specific, it is easier to tell when you get off track. If you have no vision or goals, you often don’t even realize you are on the wrong path until something goes terribly wrong!
  10. Put money into proper perspective.
    Having money can certainly make life easier, more convenient, and less stressful. But always remember this: If your biggest problems are money-related, consider yourself VERY blessed. Money problems can be fixed. There are other more important things in your life – your relationship with God and the people you care about, your health, and your integrity, to name a few. Don’t allow financial frustrations to ruin your relationships, cause you to be angry with God, do things that compromise your integrity, or stress you out to the point of causing high blood pressure, panic attacks, or other health problems. Count your blessings and remember that life’s richest rewards will never be found in material things.

 

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Saving

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If you believe that every cent counts, First National Bank (FNB) has come up with a way for you to start saving your small change with its new savings feature, Bank Your Change.
Bank Your Change works by allowing you to save your “left over” cents each time you use your FNB cheque or debit card to pay for a transaction. French says FNB came up with the concept as a means to start reviving a savings culture in South Africa.
In three months, more than 12 000 customers have signed up for Bank Your Change, which is available on FNB’s personal cheque accounts.
Shane French, FNB’s head of consumer products, says: “The take up of Bank Your Change shows that there is appetite among South African households to save, provided there is a cheap and easily accessible tool to do so.”
As a percentage of disposable income, household savings has fallen from around 5.4 percent in the 1980s to a negative 0.1 percent in 2009. This means that the average South African is not saving any money at all.
How it works
Whenever you make a purchase using your FNB cheque or debit card, the amount is rounded up to the next rand. The difference between the purchase price and the rounded-up amount is then transferred into a linked “savings pocket”, at no additional cost to you.
For example, if you buy something for R32.50, the amount will be rounded up to R33 and 50 cents will be transferred.
If you want to save more, you can select an additional amount of R2, R5, R10 or R20 to be deposited in the savings pocket.
Transfers between your cheque account and the savings pocket are free, and you earn interest on your savings on a tiered basis.

If you believe that every cent counts, First National Bank (FNB) has come up with a way for you to start saving your small change with its new savings feature, Bank Your Change.
Bank Your Change works by allowing you to save your “left over” cents each time you use your FNB cheque or debit card to pay for a transaction. French says FNB came up with the concept as a means to start reviving a savings culture in South Africa.
In three months, more than 12 000 customers have signed up for Bank Your Change, which is available on FNB’s personal cheque accounts.
Shane French, FNB’s head of consumer products, says: “The take up of Bank Your Change shows that there is appetite among South African households to save, provided there is a cheap and easily accessible tool to do so.”
As a percentage of disposable income, household savings has fallen from around 5.4 percent in the 1980s to a negative 0.1 percent in 2009. This means that the average South African is not saving any money at all.

How it worksWhenever you make a purchase using your FNB cheque or debit card, the amount is rounded up to the next rand. The difference between the purchase price and the rounded-up amount is then transferred into a linked “savings pocket”, at no additional cost to you.
For example, if you buy something for R32.50, the amount will be rounded up to R33 and 50 cents will be transferred.
If you want to save more, you can select an additional amount of R2, R5, R10 or R20 to be deposited in the savings pocket.
Transfers between your cheque account and the savings pocket are free, and you earn interest on your savings on a tiered basis.
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