ability to competently manage the money - especially valuable asset in times of financial crisis, when the purchasing power of the population is decreasing, inflation increases and exchange rates are completely unpredictable.Below - common mistakes in money matters, and expert advice on financial planning, how to learn how to manage their own finances.
Error №1.Do not keep the budget
budget - even the most basic thing in the financial planning.Therefore it is especially important to be careful when preparing it.To get started is to make its own budget for the next month, and after a while -zanyatsya years.The basis take your monthly income, subtract from it such regular expenses as the cost of housing, transport costs, and then select 20-30% on savings or loan payments, mortgages.The rest can be spent on life - going to the restaurant, entertainment and so on. D. If you are afraid that you may spend too much, limit yourself to a certain amount of weekly expenditure in cash.
error №2.Do not save money for unforeseen expenses
«When people borrow, they think they have to return it as soon as possible - says Sofia Bera, a certified financial planner and founder of Gen Y Planning.- And gave his redemption all earn.But this is not rational. "If you do not "nest egg" for a rainy day, in case of an emergency (eg, urgent car repairs) you have to pay by credit card or to get into new debt.After each paycheck set aside $ 50-100.Keep account of at least $ 1,000 in the event of unexpected expenses.And gradually increase the "safety cushion" to an amount equal to your income for three to six months.
Error №3.Do not leave a will
If you have children, if you have a house in joint ownership, if you own a business, then you should have a will.Otherwise, in the future, the question will arise when the inheritance may be conflicts.So you should make a will, even if prior to retirement is still far from you.And be sure to use the services at the same time a good lawyer.
Error №4.Do not make the insurance in case of disability
«People do not like to think about death and disease, it is clear.And those who think about it, think that the worst thing that can not wait to come - is sudden death, so often the fear of living.But more important to take into account the more likely scenario, namely the inability to make money "- says Sofia Bera.Be sure to make a full life and health insurance.If you already have such insurance, carefully review the terms of insurance to the contract were provided options for different occasions.And of course, we hope that this insurance you will never come in handy.
Error №5.Do not insure your life
It is very important to insure life, if you have young children or elderly parents, which except you, no one can take care of.Look at different options for insurance, not to overpay for the contract.Perhaps you will have enough insurance coverage to the period from 5 to 30 years, that is the time when children are still dependent.Study offers of different insurance companies.Use the services of an expert in financial planning - it can offer the best option coverage.
Error №6.Use expert advice on investments for financial planning
«expert on personal investments can help in matters of investing money, but he is not always able to see the complete picture of your financial condition.So, he does not need to know whether you have the means to further long-term investment and whether you put contingency "- says Sofia Bera.In addition, an expert on investment and be able to advise how best to choose the insurance and which bank to open an account.
Error №7.To think only of profits when investing
«Usually when people are planning to make an investment, they only think about profit and do not realize that losses are possible", - says Harold Even, president of financial management Evensky & amp;Katz.He says that sometimes people do not do basic mathematical calculations.For example, forget that if one year they lost 50%, and the next year received 50% of the profits, they are not returned to the starting point, and have lost 25% of savings.So think about the consequences.Prepare for any variants.And of course, it is wiser to invest in a number of different objects for investment.
Error №8.Believe rating and outlook
«People usually look for quick ways to make a decision - says the Even.Everyone likes to rely on the ratings or read the experts' forecasts.But in today's world is changing too fast.But today, experts and ratings in one day may completely change. "Therefore, do not expect that an investment in the next year will behave in the same way as in the past."Investors are earning much less than their assets because they buy securities at the peak, and in this moment is usually the decline begins," - says the Even.
Error №9.Do not just pay credit card debts
Often when using a credit card people are more easily make the minimum payments proposed by the bank (typically 10% of the total debt), feeding the illusion that they are designed with the bank.And then a few months later I was surprised to find a huge amount of debt on the map, because in addition to the accumulated over a long period of principal figure, it calculated the interest that credit cards are the high interest rates for loans.Therefore, pay all the amount of debt for each statement at the time provided by your bank, and not just part of it.
Error №10.To have a limit on the credit card that exceeds the monthly income
If the credit card gives us the opportunity to take advantage of higher amount of our salaries, we may be tempted to spend more than they really can not afford.Late payment of credit card debt can lead to a large percentage.In this regard, please contact your bank and ask them to lower the limit on your credit card.
Kathy Caprino, Larisa Naumenko
Articles Source: forbes.ru