Sunday, May 8, 2011

Personal Finance Tips: What Every Woman Should Know About Becoming Financially Independent

Truly being debt free can seem like an unrealistic concept for many of people. The normal American presently spends a great deal more than they earn and can barely keep up financially. To become free from debt is certainly not hopeless, regardless of what people may assume right now! Keep reading to learn several money tips that each and every female needs to fully understand, even if she hates math!

In order to be debt free, you must start out by having a spending budget. Regardless of whether you earn a whole lot of cash or a little right now, you will need a budget to fully understand where exactly you are going. Just think of it as your budgeting guide meant to help you long term.The budget is your own personal financial road map. If you don't know where you are going, how will you know how to get there? Analyzing your spending habits will enable you to know where you are going so you can develop an absolute financial plan for your future.

Start saving money early on and often, even when it seems extremely hard. Saving money every month is essential on many levels. It allows you to have immediate cash when times are difficult, no more relying on credit cards! Saving money each month can help us to learn to be self-disciplined with our financial resources. If you have absolutely nothing in bank account, your first objective is to have $1,000 in an emergency fund you can fall back on. The emergency account will let you rely upon your own own cash rather than credit lines when a situation suddenly happens (and it will!). When you get your emergency account put together, start contributing to your retirement by committing to your corporation's 401k plan or start an individual retirement fund. It's certainly never too soon or too late to begin saving money for the future!

Consumer debt can be devastating to your personal finances. The best way to be financially free, is to repay your debts and not accumulate any more debt. This way your income coming in will go towards personal savings, as opposed to eliminating debt. Start off small by paying off the card with the smallest balance first. After that card is paid back off, start putting on that money towards the card with the next lowest balance etc. If you happen to end up with a raise or maybe a tax reimbursement, apply this income towards debts instead of wasting it. This highly effective "snowball" method is a wonderful technique to pay off debt quickly. When you see debt being eliminated, it is actually fulfilling and motivating and will help keep you going!

The small things we don't think about can have the biggest effect on your finances. Even though it probably doesn't seem like it, small items can add up and burn up a big portion of your hard earned money. Wasting just $5 extra each day will add up to a whopping $150 in unplanned costs for the month. However this will also work in the complete opposite way. Putting $5 to pay off debt every day can equal another $150 paid back in debt monthly!

It can often feel like it's next to impossible to begin to get your own personal finances in order. The most crucial thing to remember is changing your financial situation is almost always about behavior. If you're able to change many of the habits you are accustomed too, you can start to see a massive impact on your budget. Once you pay attention to the little expenses, you will see they no longer add up.

If you would like more assistance with getting or have questions about the area of personal finance, check out my 16 week Budget Bootcamp: A Common Cents Approach to Personal Finances and Money Management for Women.

Oh, and I also made a cute little video about it too!!