Most Important Pillars of Managing Personal Finances

For many people, money is a difficult area to navigate. Sometimes it’s good to step back and take a hard look at the basics. In order to do so, we’re going to break down three of the most important pillars of personal finance. They include monitoring, educating, and saving. These three areas are at the core of everything to do with money and can help you get into a money-savvy mindset.

Keep a Watchful Eye

The only good way to know what’s happening with your finances is to monitor them. It’s very easy to lose track of spending when not checking in on your accounts. Luckily, most financial institutions make it simple to access accounts and monitor your activity. Online banking services and smartphone applications are a vital tool for everyone’s personal finance. The more you know about your money, how you’re spending it and identifying problem areas, the better equipped you are to improve your financial status.

Stay Educated

Achieving personal finance goals takes a fair amount of planning, understanding of the market, and general know-how. In order to reach a place of stability, it’s imperative to soak up as much knowledge as possible. Learning everything from effective budgeting to best investing practices will only help you succeed. Devoting time and energy to increase your knowledge is one of the best things you can do for yourself and your wallet.

Save Aggressively

Increasing personal wealth comes down to how aggressive of a saving plan you have. There are two things to keep in mind when it comes to saving. The first thing is to save as much of your income as possible. If this means you live like you’re broke – do it! Surviving on less money is excellent motivation to continue building up your savings. The more you save, the easier it becomes to reach financial independence. The second thing to keep in mind is how you save. The best option is using an account that makes it difficult to withdraw money from unless you absolutely need it. Having an account like this will remove the temptation of dipping into savings for unnecessary spending.

Financial Prep When Searching for a New Job

Whether you’re searching for a new job to procure greater happiness or to land a larger salary, you might not think of this quest as a task that you need to financially prepare for. However, you should take certain steps to ensure that this search doesn’t leave you with money problems.

Consider Your Current Position

In the event that you are planning to stay at your current position until you find a new job, then you may not have a tremendous amount of financial concerns. However, this approach isn’t possible in all fields. For example, you may need to constantly take off from work for interviews, which could compromise your position at your current company. Additionally, you may find that a full-time job and a full-time job search are too much to handle together, at least if you want to put your efforts into the latter.

Allocate Some Funds

Going on interviews is probably not something that you think will cost money, but that isn’t always the case. If you are applying for positions where you need to give a lesson or a demonstration at some point in the interview, you will have to purchase materials to put these projects together. Keep in mind that you won’t necessarily get the first job that you interview for. Also, each one might require a different type of lesson or demonstration, meaning that you would have to buy additional supplies.

Account for the Commute

You might not be on a search to have a shorter commute. In fact, you may be considering a longer one or even a long-distance move to get the job of your dreams. Whether you are paying more money for gas or you are flying across the country and staying in hotels for the interviews, you are going to have to put funds toward these endeavors. Longer drivers or days away also means you’ll be paying for meals.

Stock Your Savings

When you know that you’re going to be looking for a new job, the time has come to put as much money into savings as possible. On top of these related costs, new jobs can be precarious. You don’t necessarily have a guarantee of a position for a long period of time, so you want to be prepared in the event that the new job doesn’t work out.

Searching for a new job isn’t a task that many people associate with costs. As you can see, however, you should prepare yourself financially.

How to plan an inheritance

When you think about providing an inheritance to your loved ones after your passing, you may have high hopes that the funds will improve their quality of life for many long years or even decades. However, cases of people obtaining a windfall of cash, such as through lottery winnings or an inheritance, have been well-documented. There are numerous instances where individuals have blown through millions of dollars in a very short period of time and who are left in dire straits for the remainder of their lives. There are a few steps you can take as you plan an inheritance that will prevent this from becoming an outcome for your loved ones.

Determine Your Intentions

As a first step in planning an inheritance, it is important to determine who the funds will go to and what goals you want to achieve by giving them the money. For example, you may have adult heirs who have proven their ability to manage their finances, and you may be comfortable giving them a lump sum of cash. Perhaps you have younger heirs who have been frivolous with their money. Consider taking your heirs to financial planning meetings so that they are aware of your intentions and can learn how to use the money once they receive it.

Set Up an Inheritance Structure in Line With Your Plans

With each heir, you may have a different financial plan. Some heirs may receive a lump sum of cash. Minor heirs may receive funds through a trust that is established under the supervision of a parent. Others may receive an inheritance through an annuity that doles out cash on a monthly or quarterly basis.

Create Financial Guidelines

There may be no requirement for your loved ones to follow your guidelines after they have access to the funds you provide to them. However, you can create guidelines with the best intentions, and some heirs will follow your instructions. For example, you can instruct a younger heir to invest at least a portion of the funds they receive each month from an annuity. Explain that the investment will provide additional wealth after the inheritance payments have ceased.

You may not be able to fully control how your loved ones spend their inheritance after your passing. However, you can create safeguards and controls through how the inheritance is provided to them. You can also educate them about finances in your living years and provide instructions for the funds after your passing. By taking these steps, you can create an effective inheritance plan.