According to a CNBC study, more than 75% of Americans manage their own money. But, consumer debt has risen to $4 Trillion. This means more and more people don’t know what they are doing and keep paying for things they don’t need or even really want in order to keep up with the neighbors.
Here are my 5 tips for making better money decisions.
- Sleep on it. Wait at least one day to make decisions. Being decisive with your money isn’t always a good thing. Many people in the #debtfreecommunity put things in their Amazon cart and then don’t checkout until a day or two later. That gives you time to think about purchases.
- Save for it. When making a big decision, you should always save for it. If you’re thinking of buying a car, start saving a big down payment. You should be paying at least 20% of it in cash. Or, you can even pay for it in full. If you can’t afford to put down 20% of it, can you really afford it?
- Plan for emergencies. This one comes up over and over. The survey says that most Americans can’t even afford a $1,000 emergency. But, especially if you own a home or have a big family, these happen all the time. You don’t want all your money decisions forced by emergencies.
- Plan for all expenses. Understand your true expenses and plan ahead for how to cover those expenses. If you keep having emergencies, build a fund each month. As you budget, this will get easier.
- Make it do. How much of your spending is for wants? The 50-30-20 principle, says 30% of your money should be for wants. This includes shopping, dining out and hobbies. You take your after-taxes paycheck and multiply it by .30 to calculate what 30% of your take-home money is. What could you cut out? What could you use again? What could you make do with?
It’s finally spring and it’s a great time to turn your finances around. I offer zoom appointments to help you get started on fixing your finances. E-mail me through my contact page.