How to Manage Your Finances - 8 Tips to Take Control of Your Finances

By - Carolyn Anderson

How to manage your finances is one of the important components of having a good life. Whether you have a smaller income or a better one, you will truly save yourself from a lot of worries and trouble if you know how to manage your finances well.

(1) Set priorities carefully plan your finances. Know your wants and your needs. Do not be confused with what you need and what you want. If you want to make big purchases like getting a home or a car, careful planning will be your key to make it a little easier.

(2) Make a budget. It is always helpful to make a guide on your spending for the next few months. Having a plan on spending is very much helpful for you to see how much you can afford to spend in a month. Make a list when you go to the grocery or when you go shopping and keep reminding yourself to stick to the list. Sticking to your budget today is definitely one good way of being free from financial worries later.

(3) Do not spend more than what you earn. Do not splurge on spending with your credit card if it is not clear where you will get payment for it the next month. Thinking about spending a lot today hoping you will get a job the next month is a no-no.

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(4) Manage your debts. Pay your credit card promptly and do not go over your credit limit. Late payments and maxing out your credit cards will cost you expensively. When credit card companies are giving you lower interest rates, you might end up having to pay for higher fees. Late payments and overspending will likely stain your credit report in the end as well. Knowing how to manage your debts is indeed one huge step in learning how to manage your finances.

(5) Save. Make it a habit to save and include savings on your budget. Allot a percentage of your income as your savings. Having a good amount of savings regularly always helps you face your future with confidence and will save you from a lot of financial worries.

(6) Be informed. If you are borrowing money, making investments, or renting anything, always be informed with interest rates and the terms and conditions. When dealing financial transactions, it is always wise to read the fine prints. This way you will save yourself from financial troubles later on.

(7) If you want to invest your money, be wise. Know your market, know the feasibility and success rate of your investment. Especially these days where the economy is down, you also have to be careful where to invest your money. Find and study the opportunities with lower risks.

(8) Think your way out of debts and overspending. Indeed, it may be difficult for some to overcome the habit of overspending and splurging on many things in life. If you are facing the same situation, try to train the power of your mind to manage your thoughts on spending. Resist the urge to do unplanned spending by waiting for a day or two. In the end you might find out you don't exactly need it.

If you want to live a good life, know how to manage your finances as this comprise a big part of being happy and worry-free in life

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The 9 Most Important Elements of Retirement Investment Planning

By Patrick Millerd

Every investor's retirement investment planning situation is unique, and you have to make all the decisions which are right for your own situation. Use the following points to stimulate your thinking, to use as a checklist and make your moves.

1. Make your cash work for you You are not making much money if you have cash in a money market account. Look for other alternatives.

2. Shop around for interest rates Try and find the best interest rates you can to provide some protection against inflation. Don't leave excess funds in your current account earning no interest.

3. Manage your emergency fund These funds are not likely to be needed any time soon so maximise their return. However ensure that they are available if you need them in a hurry.

4. Asset allocation is a priority The way the assets are allocated in your portfolio is the most important investment decision you will make. The allocation will specify how much is invested in fixed income and equity investments and within equity how much is in big company stock funds compared to small company stock funds and how much in value stocks or growth stocks.

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5. Rebalance your investments Returns on the various elements of the portfolio will vary year by year. To ensure that the risk stays the same as the planned risk the portfolio will need to be rebalanced annually.

6. Diversify Many portfolios are not that well structured. The benefit of diversification is that when one part of the portfolio doesn't do that well it should be supported by another portion that does exceptionally well. When thinking about diversification don't forget to consider small cap shares and international options.

7. Define your investment policy Have a written investment policy for yourself. It is a proven fact that people who have a written plan are far more likely to achieve their goals than those who just sort of think about them. As you write down your policy you will be forced to think about the various elements and the plan will help you to see the bigger picture when the market is trying to manipulate your emotions.

8. Set measurable goals Have a written retirement plan with specific long-term financial goals. Think about when you want to retire and what retirement will mean for you. Think about the lifestyle you wish to lead and the financial resources you need to support it. A rule of thumb is to have a portfolio of 20 times the size of the annual income you will initially want from that portfolio.

9. Have written down plans The whole concept of retirement planning might sound like quite a mission and you're right - it is! But if you don't have clear goals and plans to achieve those goals you will drift aimlessly in a dream.

Retirement investment planning will ensure that you are not one of the majority of people who have no clue of how much they need or how much they will have. You will be on your way to a successful and comfortable retirement.