10 Errors To Avoid in Financial Management
Of the biggest problems currently faced by the people is the money management problem. Most employees do not have the money dedicated to the emergency, and there is a significant proportion of those who have financial debt prevents them from spending and live comfortably, and others not able to restrain themselves in spending here and there. It is very difficult to save money until the time of your retirement, if you are unable to manage your money now and suffers from various debt accumulation.
10 Errors To Avoid in Financial Management
We’ve noticed some common mistakes among the people, which may adversely affect the ability to daily manage their finances, and thus their inability to save money. We will explain here 10 main reasons:
1. Get a huge tax rebates annually. This indicates that a large salary deducted from the tax ratio. There is nothing wrong to be this and Celtic savings (assuming that you are actually saving these recoveries). But the problem is that this method is not the most successful in saving money. You can not get the interest rate from the state on those tax rebates, as you can not have access to these funds at any time, especially in the event of an emergency where you need money.
2. that you do not know where the money goes. It is natural that you can not calculate what it knows, which is why usually behind surprise some people when you see revealed their bank accounts and credit cards. To avoid this from happening, you can follow the way to check your expenses for the past three months, at least through the program (Excel – Excel) and classified according to certain categories. You can also use Cash Formula by free to keep track of your expenses on the Internet. It provides both locations Applications (Android ) and (Apple) mobile devices. The two methods are correct, choose what relieves you more, and do it always.
3. Forget about monthly expenses is ordered. One of the most forgotten expenses when money management is that of vacations and travel. You can divide the total spent in the previous year during the holidays on the 12 to show you the amount per month. Consequently, you should provide a similar amount per month. And when you decide to take a vacation, you’ll find this amount is present without the need to use credit cards or spending your monthly budget.
4. More than the actual spending needs. Once you know how your spending and where the money goes, then you can think about ways to reduce spending. And you should remember that many of the people around you ponder ordered amounts less than it spends. You will not harm you minimized your expenses a little bit. You can do this in several ways: to get rid of subscriptions that are never used, and think twice before you buy anything Vtsol yourself: Do I really need this, or is it a luxury that I can live without it? You can also save by finding other ways to give you the same result, but costs less. For example, you can bring lunch with you every day from home instead of buying meals. These changes, despite its simplicity, affect the financial condition favorably with the passage of time.
5. rely on monthly salary to cover expenses. This may be a serious mistake, especially with the high unemployment and the scarcity of vacancy rates. For this many financial experts now advised saving enough 8-12 months of necessary living expenses instead of the traditional period ranging from 3-6 months. It is the best means to achieve it be involved in the pension fund, because all in this fund will be exempt from taxes and fines under any circumstances (the profits from deposits taxes and a fine of 10% if you drag them before you arrive the age of nine, fifty-half) way you can use a financial emergency fund, saving for after retirement without having to pay taxes. But make sure you invest your money in a safe place and always available. (If your income is high, then you can be spared in the pension fund “is not subject to the deductible,” and then you can shift your deposits to a regular pension fund, but may have to pay tax on the conversion).
6. sporadic payments to pay off all your debts. This is certainly better than no payment at all. But you can speed up the write-off more in the consequences of your debt by allocating all additional amounts that you have available to repay the debt with a higher interest rate as you can pay a small amount of scattered to cover the rest of the other debts.
7. belief that borrowing against real estate asset is wrong. This belief may involve some health, where you finally venture into the ownership of your property and this is something serious if there is a possibility that you would be unable to repay the amounts you. In contrast, the refinancing credit card through borrowing against real estate asset has been considered something logically when interest rates are less subject to tax deductible.
8. refrain from borrowing from your retirement program. As I mentioned in the previous point, it may be with you some right in this matter. Most people believe that the loans taken from the free retirement program just to deduct the interest from the account later. But in fact there is a large cost which is your loss of profits, which would be taken from your account, and there is also a big risk as the loan is considered taxable and deduct 10% as a penalty for early withdrawal 60 days after you leave your job.
9. savings as remain the end of the month. If you do, do not be surprised that there is no amount of money saved by so already. Instead of this, put aside what you intend stashed away before they embark on spending. The easiest way to do that is to participate in the retirement program offered by your employer as being deductions from your paycheck directly. The same is true on health care costs, as you can subscribe to a insurance programs so that the value of the premium being automatically cut off.
10. Saving a small amount in the Maximus Profits retirement program. If it is important to know how much you can spare for the holidays, it is also important to know how much you can save for the long holiday (no period after retirement). The provision is made simple is a good start but it will not be enough. To be able to know the amount of savings that will need him in the future, look at the size of your expenses now and compare them with what would be the case when you retire in order to have adequate retirement budget is available.