Save $2.75 a Day and Change Your Life
If there is something that we learned from the recent presidential election, is that small changes can have indeed a big impact. The best example of this is how just a few thousand votes in a couple of swing states completely decided the election and changed forever the direction the country will take in the next four years in every aspect.
Of course, the finances of every person in the country will also be affected, and despite what you might think, it doesn’t take a huge change to alter your financial situation. Instead, small changes in your day-to-day habits have major impact on your financial life. However, unlike politics, which can change radically from one day to the next, once you establish your financial habits and start applying them, you will definitely start seeing results of your efforts in the mid to long terms.
Let’s take a look at a few examples of some basic financial rules that you can expect to apply on your everyday life.
The Interest Rate
Whenever someone lends you any money, be it a personal loan from a friend or a student loan from a bank, always expect to be charged an interest. However, never be fooled that because you are charged only small payments every set time period (monthly, weekly or yearly), the interest rate you are paying is small at all.
In fact, what matters even more when it comes to repaying a personal loan (or any kind of loan for that matter) is the time you have to fully repay it and not the amount of each installment. Paying $10,000 a month for one year is far preferable than paying $1,000 a month for ten years. Remember, always do the math.
Loans are Important, but with Measure
One of the most important parts of managing your financial life correctly is (believe it or not) to ask for personal loans or for any other kind of loan from any financial institution. Of course, asking for a personal loan is only the first part of the equation. The other part is to actually repay it on time and on schedule. If you manage to do this with discipline and constance, your credit score will get a very nice boost and you will become slowly, but surely, a far more reliable customer for any bank, which in turn, will help you acquire other loans faster in the future.
In addition to this, always remember to take things easy. If you hop from bank to bank asking for personal loans you credit score will actually drop, since every bank will place a hard inquiry on your credit history, which lowers your overall credit score. What you have to do is ask no more than one bank every month until you get your personal loan, once you get it stop and make sure to repay it.
Save Every Penny Possible
This might sound like obvious advice, but the truth is that the more you save, the better your financial situation becomes. The problem here is that many people think that in order to accumulate substantial savings, they need to save substantially as well. This couldn’t be further from the truth. Think about this: Could having $2,000 help you financially? Definitely yes, right? Well, can you believe that all you need to gather this amount is to save a measly $2.75 a day for a two year period?
Think again: If you just skip that coffee or the cinema for the week, you could be saving this amount and generating a lot of cash for the near future either to treat yourself to something that you always wanted or to use as emergency funds in case things get tough.
In any case, you should always consider all of the tips concepts above and take them seriously despite them being somewhat simple on the surface. Implement them and start building good financial habits from the start. You will definitely not regret it in the future.