6 personal finance rules that are too simple to ignore
It’s so easy to get defensive about personal finance – it’s a touchy subject for most people, so few of us are willing to open up to the possibility that what we’re doing isn’t working and that’s ultimately the straw that breaks the camel’s back. Take the Titanic – yes I know it’s an unusual analogy but stick with me – do you know why the Titanic was such a disaster?
Nobody paid much attention to the advice given to them. When they finally saw the Iceberg, it was too late.
Like the Titanic, maybe you’re sailing straight into a disaster. Without further ado, here are our top 6 rules for personal finance.
Check your interest rates
Yeah, you got me. This is an obvious personal finance rule. Frankly it would be surprising if this hadn’t already come to mind. But if you’re anything like me you probably find its the simple things you often end up neglecting.
When stuck between deciding which debts to prioritise, always get rid of the highest interest liabilities first. Those are the ones that are going to cost you in the long run.
Pay attention to your interest rates, especially when it comes to credit cards with an interest free period – you’re probably going to forget about the interest free period and find yourself paying off a huge bill unexpectedly a few months down the line.
Start a cash diet
I mean, I’m not asking you to literally eat your money. But maybe you’re doing that already? It’s so easy to wave goodbye to your cash as it dances off the end of your bank card invisible to the naked eye. You’re not having to hand over a thick wad of bills for those “bargain” flight tickets, and that’s probably part of the reason why you find yourself staring at your bank statement in utter disbelief at the end of the month.
Ditch the bank card and start using cash, you’ll probably find it more difficult to splash out then when you’re painfully aware that you’ve just about emptied your wallet two weeks before payday.
Set lite goals
Typically setting huge goals and being unable to deliver on them is exactly the opposite of what needs to happen. Start small, you don’t have to save thousands of pounds straight away if you can’t afford to.
Saving becomes easier the more habitual it becomes. If you’re used to saving £15 a month, then £30 should be second nature, and then £45, and so on.
Saving can be difficult for some people, but it’s important that you start somewhere. There’s a common phrase I want to share with you; the fool is the precursor to the saviour. What does that mean? It means everyone starts somewhere. There was once a time where Warren Buffet knew nothing about Business and Elon Musk wasn’t a world renowned genius. So, to get your savings in order there’s no shame in starting small.
Learn how to appreciate what you have
Maybe you have a bad habit of making impulse purchases and walking out of shops a little bit more disappointed in yourself than you were when you walked in.
Too many people get so caught up with the new things that they forget about what they already have. One of the main reasons why millionaires stay millionaires is because they don’t waste money on things they don’t need – contrary to what you probably think millionaires do. Most of them are actually quite frugal.
You don’t have to stop at negotiating your salary
People are people. They’re waiting for you to influence them. It doesn’t matter who they are or what they’re giving you. There’s almost always some wiggle room when it comes to paying out or getting paid. Try this out the next time you go for a haircut. Politely, mind you, lest you walk into work the next day with a racing stripe cut down the middle of your head that you definitely didn’t ask for.
Too many people operate on the assumption that everything in life is fixed and that they as an individual have absolutely no influence over it. Of course you do, all you have to do is ask and see what happens.
Review your credit report regularly
Don’t wait for a nasty shock. Avoiding a regular check definitely isn’t going to help. Personal finance masters are the proactive types. Check your credit score, and figure out how to start approaching your debts.
Having a plan in place is half the battle, you’re already way ahead of the curve at that point, which is more than most people can say. A lot of people we talk to at Basik Money neglect this simple detail, and their quality of life is so much worse as a direct result.