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5 Ways to Optimise Your Personal Finances

Guest post by: Andrew Boyd

Article Overview: It's easy to overlook your personal finance and let them fall into a bad state with payments going out for services and goods you no longer need, use or require. This article will help to right the most common wrongs and get your money back into fighting shape.

5 Ways to Optimise Your Personal Finances

In this economy, many people are struggling just to make ends meet. Whether struggling or just trying to build a bigger nest egg in case of emergency, it never hurts to give the budget a once over and see where it can be tweaked. Here are a few tried and true suggestions for trying get the most out of your money, whatever the budget.

Use These Tips to Get Your Money in Shape

1) Track Every Penny for 1 - 3 Months

Do you think you know where your money goes? Many people think they know but they don't really. Carrying a notepad and pen everywhere you go and writing down every single thing you buy and what you paid for it can show you where it really goes and change your relationship to the all mighty dollar. For most people, this is an eye opening exercise that reveals hidden expenses and hidden needs that they never would have thought to include in the budget. Hidden expenses are sometimes an easy place to cut fat from the budget. Hidden needs can prove to be frustratingly stubborn expenses which, if not accounted for, can blow any budget plans.

2) Get the Bigger Picture of Expenses

Instead of listing your cable bill, video game hobby and computer game habit as separate expenses, group them under "entertainment" and then rethink what gets you the biggest bang for the buck. A hidden source of fat in the cable bill may be premium channels. Think about how much you really watch them. If you do not watch several movies a month on a premium channel, it may make more financial sense to drop the premium channel and rent a movie once in a while. Computer games may be a good substitute for video games and many oldies but goodies are available online for free or cheap. It can be a nostalgic trip back in time and a boon to the budget as well.

3) Comparison Shop

Comparison shopping used to involve a lot of foot slogging hard work, driving from store to store. With the internet, a lot of that leg work can be eliminated by doing some research online. There are sites to comparison shop almost anything, from cars to credit cards. When doing your research, do not just compare price. You also need to compare features to ensure you are comparing apples to apples and figure out which deal actually brings the most value to the table. For big ticket items, where thousands of dollars may be at stake, the time and effort you put into research may pay better per hour than your job.

4) Take Advantage of Loyal Customer Deals

Do you have a credit card you've had for years? Do read all the mail that relates to it or just look for the total due so can pay your bill? Some companies make periodic special deals to loyal customers. Credit card companies sometimes send out checks that will allow you to transfer your balance from another card and enjoy a special low rate for a few months. If you aren't taking advantage of such deals, you are throwing away money. If you are renewing a subscription service, ask if there are any loyal customer deals available. It only takes a minute and can save you money for months to come.

5) Consolidate Debt Using the Debt Snowball

You may be able to free up some cash by getting a consolidation loan at a relatively low interest rate or moving credit card balances to lower interest cards, then use at least part of the money you are saving on interest to pay extra on the highest rate debt you have. It would be a good idea to also use some of that additional cash to start a savings account and build an emergency fund. In the long run, it's the only way to break the credit card habit. Credit cards are usually the highest interest rate debt you have and are very frequently used unwisely. An emergency fund can not only help you break the habit but will also pay you interest at the same time, which can help move you towards an investment mentality.

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Article Tags: credit cards, debt, personal finances



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