Prioritizing personal finance is crucial for families and single people of all backgrounds and in all corners of the world. Great saving, investing, and spending habits start out as small changes in your daily routine and snowball into powerful trends that can redefine the way you think about finance and money more generally.
With these three great personal finance hacks, reinventing the way you see money can be made easy. You’ll never think the same about state tax compliance, saving strategies, or credit accounts again!
1. Calculate the true cost of credit cards and other loans.
Financial institutions know the importance of a full-spectrum understanding of credit, but far too many homeowners and other consumers don’t quite get how the multifaceted world of finance and credit impact the individual. Credit accounts are a great way to extend purchasing power, but they must be used responsibly. While the prime rate hovers around 20% APY in the current U.S. market, American consumers maintain a national average of about $6,000 on their credit card account balance during any given month.
Debit card purchases remain a superior option for those who want to maintain a minimum balance on their credit account while working to eliminate foreign transaction fees (which are often removed from online bank options like Tangerine, Synchrony, and Ally Bank). Whether you’re an account holder in the United States or beyond, seeking out low fees and great bank services is a must. Credit provides one way to approach your account needs, but must be mixed in with other deposit account and checking account options.
Rather than helping to create wealth, these lending opportunities end up existing as an anchor weighing down your future financial independence. One main culprit here is in the incentives, perks, and rewards that credit card companies offer their users. A cash-back card, for instance, is an excellent resource, but it will end up costing you far more in the long run if you don’t maintain a low balance on the debt because the interest rate will eat away at the “free” cash streaming into your account with each purchase made.
2. Invest in your future with easy savings strategies.
Investing in your future is a must for anyone hoping to retire someday. Saving with the help of a financial institutions investment products is a great place to begin, but investors will need to incorporate their own strategy for growth as well.
Combing through a list of the best online banks is a great way to find an online bank that offers an excellent interest rate on savings account funds. These are perfect for those who are hoping to continue building their emergency fund or general savings account. Online banks must finance far fewer overhead costs, and these savings are translated into better customer service, interest rates, and other perks for those who maintain a bank account in the branchless system of online banking.
3. Lock in great discounts on your typical spending for greater cash flow.
Saving money on the things you buy every day is a great way to create better cash flow and financial independence as well. Many people may wonder how to get started in saving and discount hunting, but the truth is that this is actually pretty easy to accomplish.
A great example is in the insurance and other premiums that you pay, that are often directly extracted from your checking account. These accounts (cable, internet, electricity, car insurance, homeowner’s insurance, and many more) drain capital from your cash flow each month, but they can be negotiated by a frugal homeowner or consumer. Switching electricity suppliers is an easy task and only requires you to call up your power company. Selecting a low-cost electricity provider is free and simple, and it can save you hundreds of dollars each year. The same strategy applies to your insurance coverage needs and in virtually every other monthly service that your home relies on.
Increasing your financial acumen is a must for every consumer, regardless of background or current circumstances. Take these measures on board for greater financial strength and cash flow appreciation over the long term. Start growing your financial health today!