Money is a strange thing. It's something that we all deal with daily in one form or another. But few of us are actually experts on it. Which is kind of silly really because then we have to pay people like accountants and financial advisers to get advice on what to do with it! But most people don't even do that. In fact, most folks are so unaware of how little they know about handling their own finances that they believe they are dealing with their money it the right way. When in reality nothing could be further than the truth.
How to budget
One area in which folks think they know what they are doing, but often don't is budgeting. It's the kind of thing that we see as a pretty basic skill. Yet so many of us get this wrong every month.
In particular, not budgeting for everything that you need realistically is something that a lot of folks are guilty of. It's easy to write down all of the basics like food, rent, and electricity, and then forget all about bits and bob that seem more frivolous like toiletries, that new suit you wanted for work or some car polish for your wheels.
But the thing with budgeting is that it needs to be authentic. That is that it reflects everything that you will buy and that you can't do without.
For example, you may need that suit for an important meeting at work. It's not an essential regarding your life won't end if you don't have it, but also there is a good chance you will buy it this month. That means leaving out of the budget just because it isn't essential, is unrealistic and it will throw your figures off. Meaning you can easily lose track of your budget and get into debt.
A more realistic budget would include the suit, and may even include adjustments to other things that will help offset the costs of it. Budgeting in this way, you will have a true representation of where your finances are.
Then you will be able to make other financial judgments that are beneficial. Not one that is based on a skewed view of what is happening. Something that can go on to lead to a spiral of financial problems.
How to consolidate your loans
Something else that folks think they understand well and don't is how to consolidate their debts properly.
Debt validation is a term for the activity of paying off multiple debts with a single loan. The idea is that one debt is more easy to keep track than lots of loans. So then you don't miss payments and end up incurring late charges. It is also designed so that the single payment will be more affordable for you. Freeing up more money that can be included in your everyday, monthly budget and so increase your quality of life.
However, the biggest mistake here is that some folks don't do their research before they agree to a consolidation loan. They use the first company that they come across on the internet without doing their due diligence, and that can lead to problems.
It can mean that instead of finding a reliable company, they end up signing up with an unreliable one. One that can change the interest rate on the loan willy nilly. Or one that has a poor customer service rating. An issue that always makes dealing with the financial issue even harder than it already is.
The key here is to know who you are signing up with and exactly what you are signing up for. Read the information that each company provides you, including the small print, and all online reviews of the service that customer like yourself have received. Then you can be sure that you are picking the best one.
How to save on shopping
Most folks think that they are clever if they go for the buy one get one free deal when shopping. They think they are saving money this way. But nothing could be further than the truth.
In fact, it's just a clever psychological ploy to sell you things that you think are reducing the cost of your shopping. While all it is actually doing is convincing you to purchase products that aren't on your list and that you don't really need.
Shopping the offers only works if you need that product anyway. Otherwise, It's just a waste of time and money. In fact, there are much better ways of being frugal with your shopping.
One of those is to never go food shopping when you are hungry. This is because it's so much easier to get distracted by all of the delicious treats that are on display at the supermarket when you are feeling peckish.
It can also help you to save money if you plan your meals in advance and take the list with you. Then you only end up going down the aisles which the ingredients you need are in. Hopefully missing out the more tempting but nonessential products that can raise your bill.
Or even better why not order your shopping online and get it delivered? This is the most extreme way of ensuring that you only get what is on your list. If you can get a regular payment deal on the delivery charges as well, it can end up saving you a fair bit of money off your weekly shop.
How to increase your wealth
Lastly, most people are under the belief that they know how to increase their wealth and economic value. But is this really the case?
If you needed to double your wealth in the next ten years, could you do it? Well, most people would say yes, and promptly look for a promotion or a new job. But what if that wasn't part of the mix?
In fact, there are ways of increasing your wealth and that have nothing to do with employment and working in the traditional sense of the word. These include being savvy with your savings and looking for the highest interest rate, giving you the best return.