With the ravaging effects of the covid-19 on the economy, it’s good to start managing your finances. Be very careful when obtaining cash loans and reconsider your spending habits; this will save you from most financial hardships.
This article outlines the best tips on how you can get started.
1.Shop around
Shopping around always helps us to get the best deal when we are looking for consumer items. But the same should apply to financial services.
“don’t be shy to ask for a better deal whether for your mortgage, your electricity contract or your phone plan.”
For example, your insurance, banking, superannuation, etc. it’s a highly competitive world out there, and financial companies want to get and keep your business.
And financial companies want to get and keep your business, it makes sense to look around.
2.Consider your debts wisely
Sometimes debts are good, as they allow you to get what you need at a time you couldn’t afford to get it. However, it’s good to start managing your accumulating debts, as too many liabilities will lead to further financial stress. Preferably, you could take an instant short term loan rather than a substantial long-term loan.
3.Prepare for the worst
In life, there are certain times when things won’t work the way you expected them to. Thus, when they happen, most individuals tend to be confused about the solutions to this problem. These situations may arise because of unexpected expenses, job loss, or inflation of interest rates. Therefore most economists advise that when you have a loan. Always try to stay ahead in your payments.
4.Be very cautious when using credit cards
Credit cards provide the best payment option when you have less cash, and you want to spend. They can provide you with free money for up to around six weeks. Additionally, you can get some gifts and promotional offers just by using them. However, it would help if you were very cautious about paying back the cash by the due time to avoid their high-interest rates and penalties.
5.For longer·term debt, it’s good to use your mortgage
Mortgages provide the best security for long-term debts because they have low rates compared to other borrowing rates. Thus, you should always include the debt due on your credit cards to the mortgage to have a lower rate when paying back.
6.Start having early investment and savings.
Taking advantage of compound interest is the best way to build your wealth. The best way to do that is to take advantage of compound interest – where returns build on returns.
Nevertheless, it only works for assets that provide high returns over long periods. Additionally, most banks In Australia allow children to start saving even when they are young. You can also Invest in shares and bonds.
7.Be aware of fluctuations in asset prices
There is always a belief among most individuals that the value of a property will never go down. However, the Australian authority outlines that the values may also go down in various states. Thus, individuals should accept that the prices might also go down and get prepared to purchase and sell their property at the right time.
8.Anticipate significant financial events from a long term perspective
Hearing about the Market crash can sound scary if you have invested in StockMarket – but it tells you little about how much the market fell, and you have only lost something if you sell out after the fall.
And after each of these events, the market has gone back up. So, we have seen it all before, even though the details may differ.
The best way to face this is to allow for periodic sharp falls in your investment strategy, and when they do happen, remind yourself that we have seen it all in the past, and the market will find a way to resume its long-term rising trend.
9.Identify how much you can tolerate
Most investments usually get a 20% wipe off their investment value. Therefore, when investing, you need to understand how much risk you can tolerate. Understanding the chance you can take will save you a lot of stress on the losses you can make when the investment does go your way. Figuring out happy losses will always help you bear downtrend while investing.
10.Consider seeking support from your family to save a lot of your cash.
For example, rather than renting an apartment which will present a significant challenge to service, you can choose to stay at home with your family. Additionally, you can lean on your parents for a start-off capital for your investment plans.
11.Be very careful with current trending financial options
When you hear many people talking about a specific investment option, you need to be very careful about it. For example, forex trading could make you lose a lot of cash If you aren’t careful. The same applies to instant payday loans; you need to understand the loan’s interest rates before opting for one.
In Summary
The world is in tough economic times due to the ravaging effects of the Covid- 19 pandemic; therefore, it’s crucial to revisit how you are managing your finances.
Start with managing your loans, as It’s good to opt for quick cash loans rather than long-term loans. Stay ahead of your payments and watch your investments accordingly.
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The opinions expressed in this blog are for general informational and entertainment purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific investment product.
It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice.
