How to Stay on Top of Your Debt
If you want to be financially secure in the future, then you need to get on top of your finances today. Listed below are nine tips on getting your finances in order, and more importantly, helping you to avoid some of the mistakes that people make.
Tip 1: Don’t use payday loans ever! Not only are they high interest and get you into a borrowing trap, the lenders often use questionable means to get their money back. Best to ask a family or friend, and set up a concrete way to pay them back if you need the money. You’ll know what we mean when Samesi the 6 foot Samoan turns up at your door with a baseball bat, looking for the $50 you are down. Just stay away from these rackets.
Tip 2: Check your Credit Report Annually: Checking your credit rating helps you make better financial decisions. You will also know if something isn’t right on your credit report and can see if you can fix it.
Tip 3: If you don’t understand it, don’t sign or invest in it: If an investment or loan product seems overly complicated and you don’t understand it. Don’t invest in it! You will save yourself a lot of time and worry in the future.
Tip 4: Ask what’s in it for them: If a bank is trying to offer you an additional product, or a product you may not be interested in, ask what in it for them. Chances are they will be getting a higher commission for the product. Bottom line: It may not be the right product for you.
Tip 5: Avoid bundles of financial products: If a bank of financial institution tries to sell you a bundle of financial products, you will most likely be getting a lot of over priced add ons which you don’t need. The only real benefit will be for the bank sales person who will be getting a hefty commission.
Tip 6: Write a Will and Estate Plan: We don’t like to think about it, but it can save your family a lot of trouble and legal fees. As an added bonus it also gives you the chance to shaft your cousin Netty who grassed on you about the lollies you flogged from the dairy. You always knew you would get even. You’ll show ’em!
Tip 7: Give financial gifts to family: Later in life, it is beneficial to gift some of your money or estate to your family. There are a lot of tax benefits for this, and your family will love you more for it. Who said you can’t buy love??? Seriously though, caution should be used.
Tip 8: Digitise your finances: Buy some financial software and digitalise all of your finances. It does take a few hours to set up, but once up and running, it is very easy to use and a great way to get yourself on track, and more importantly to stay on track.
Tip 9: Buy the smallest house for your needs: Buying the smallest and cheapest house that still serves your needs is a good financial strategy. Invest the money that you are saving and it will benefit you even more. Houses which you live are not really an investment (unless you sell it or are accessing equity, even then you will most likely have to buy yourself back into the market), therefore it makes financial sense to pay as little for one as you can, as long as your family is happy with it! Trying to keep up with the Jones’ will only cripple you in the long run. Rather take some advice from Kath and Kim, rather than buying the worst house on the best street, buy the best house on the worst street, that way you lord it over your neighbours. No need to worry about the Jones’!