Ways to Handle Your Finances That Aren’t Bad After All

There are so many opinions about the best ways to handle finances, but it really depends on each situation, as each are different.  What works for one may not work for another, so just because the behavior might be a little out of the ordinary it might make sense and actually work quite well.  Taking control of your finances is important when it comes to your future, so anything that works cannot be out of the question when it comes to setting yourself up for success.

Paying Off Smallest Balances First

While it may not be the most ideal when it comes to saving money on interest, but by paying off small balances first and seeing the account getting paid off with a zero balance could be enough progress to give you motivation to continue down the right path in getting out of debt and staying up on your finances.  Sometimes trying to put a dent in the large balance could seem like you’re never getting out and could cause you to give up, thinking what’s the point anyways.  At least with the small, you can tackle first and then move on to the next.

Taking on Debt

Staying out of debt is important because you don’t want to throw money away on interest every month and risk your financial future by not having enough saved up in retirement because you were too busy paying back what you owe, but that doesn’t mean that all debt is bad.  A mortgage for instance, let’s you build up equity to pay for renovations or a wedding, while actually still increasing hopefully every year.  Also, a student loan debt isn’t necessary bad either because you are investing in your future, at a low interest rate.

Having Multiple Credit Cards

The only part about having multiple credit cards that would be bad would be actually charging on each one of them and having multiple balances, making it tough to pay off each month and risk having to pay interest by carrying over one or more balances.  If you can keep them under control, having multiple credit cards actually is good when it comes to your credit score because it continues a solid payment history but also increases your available credit over your outstanding balance. Having a store card like a victoria secret credit card The only thing you’ll want to avoid is applying for too many cards because those inquires can lower your score, not to mention stay on your credit report for a couple years.

Not Having a Budget

Having a budget is sort of like joining the gym; at first you are all into it, but after a month or two you can’t stand it and you quit, then end up just paying for it every month when you don’t use it.  While you don’t have to pay for a budget necessarily, but if you pay yourself in terms of adequately saving for your future, keeping up an emergency fund, and reducing expenses, you may not need a budget to stay on top of your finances every month.