10 Personal Finance Basics Every Beginner Should Know
June 25, 2021 | June Mckaig
Building wealth has surprisingly little to do with how much you make. That’s why you constantly keep hearing about the lottery winners, professional athletes, or actors losing their money – unless the money in question is truly astronomical.
Here’s the thing, spending is easy. To build wealth, you need to know how to control what you have and direct it in a way to reaps you the most benefits. And while you might not be making astronomical money, you can still build wealth. It’s a more straightforward process than you might think – and it mostly comes down to some personal finance basics.
Make Sure You Know These Personal Finance Basics
1. Know Your Net Income
The first personal finance basics you should know is your net income. You have to know exactly how much of the money you make is yours. How much is left after all the taxes, deductions, and contributions are taken care of.
2. Know How Much You Should Be Paying In Taxes
Another big part of the personal finance basics list is don’t overpay taxes. While getting a tax return might sound like a nice idea, in the end, that’s just all the extra money you gave the government – and could’ve been using for better things all this time.
3. Your Budget Is An Ultimate Money-Control Tool
If you need to truly take control of your money, you need to start budgeting. It is one of the personal finance basics you cannot skip over. The first line of expense you take care of should be the mandatory expenses, then comes meeting your savings goal, and what’s left can be spent as you wish.
4. Saving For Emergencies Is A Priority
These days, a 50/30/20 model is a popular budget setup. 50% of your income goes to necessities, 30% goes to wants, and 20% goes to savings.
However, you should maximize your contributions to your savings as much as possible until you’ve got around 6 months’ worth of expenses saved in your emergency fund. Everything you put into that fund is your safety net.
5. Know When To Switch To Other Goals
However, it is possible to over-save for emergencies. That’s why financial experts generally agree on 6 months’ worth being your set goal – and not over that.
When you save more, you’re potentially losing money in the long run, since the emergency fund simply sits in the savings account not earning you anything. After the emergency fund is set, you should switch to investing and retirement contributions.
6. Learn As Much About Your Credit Score As Possible
Your credit score – unfortunately – has a lot of influence on your financial life. Learn what you can about how to improve it and keep it high – and then do your best to follow those instructions. Credit is an important part of personal finance basics.
7. Don’t Try To Save On Things You Need
Spending on quality when it comes to something you need is a big part of personal finance basics. Look at each purchase as an investment. Better to pay more and have the thing serve you for a longer time, then buy a cheap alternative and have to replace it sooner than anticipated.
8. Use Debt To Your Benefit
People these days either fear debt or keep turning to debt in every situation. Find the middle ground – learn how to identify the situations when getting debt is warranted. It’s a game of pros and cons. Learning how to balance them is a beneficial tip for personal finance basics.
9. Get Help When You Need It
If a financial question has you stumped – ask a professional. Getting an accountant’s help with your taxes, your credit, or your business is an investment; it will help you in the long run. Even if it might seem like a frivolous expense that has no place in your budget at first glance.
10. Double Down On Building Your Financial Stability
Taking time to build your financial stability definitely needs to be on the personal finance basics list. You need to be financially responsible every single day. If you truly wish to build long-term financial stability, be ready to commit.
Dealing With Urgent Expenses Without An Emergency Fund
Without an emergency fund, any unexpected expense might put you in a money hole – that’s why saving is your priority if you’ve yet to build one.
Getting a loan should never be your first choice when dealing with emergencies, but if the problem at hand is time-sensitive and you need money on short notice, do give registration loans a look.
Registration loans are an accessible loan option for car owners who don’t have the titles in their names or have their cars fully paid off. It’s easy, fast, and at Southwest Title Loans you can get one regardless of your credit or income type.
Registration loans use your vehicle’s registration as collateral for a lump sum of cash. They are similar to title loans in that they are short-term help that should only be used when you absolutely cannot handle your emergency expenses. But unlike title loans, we do not need to inspect your vehicle.
How To Get Arizona Registration Loans
To qualify for registration loans, you’ll need a state-issued ID or driver’s license – since you must be 18 or older – and your vehicle’s registration to use as collateral. Submit a form on the website and wait for the loan representative to give you a call to determine if you’ve been approved and for how much.
Take the required items to the meeting they’ll set up at the nearest registration loan location. The representative will help you finish the paperwork and explain the loan terms. Once everything is complete, you will receive the cash.
Remember These Personal Finance Basics For Financial Stability
When it comes to personal finance basics, these are some of the tips you should definitely remember. If you want to reach financial stability, it takes time and work – but it is possible. And if you need help with emergency expenses, you can turn to registration loans from Southwest Title Loans, Inc. in Arizona.