Financial Planning is important in every transaction that one decides to make regarding money. Financial planning that works smoothly can make you have enough money compared to nothing at all. Financial planning also involves sticking to the plan and not impulse buying just because it was a good deal. Don’t buy something just because its the hottest thing now. Here are five financial planning tips for newbies.
Student Loans
Financial planning also includes college student loans. Do you have enough money to pay them each month? How are you going to pay them each month? You might need to get a second job or refinance with a company in order to stretch out the payments.
Purchase A House
Financial planning is a main factor in whether or not you are prepared to buy a house. You need to have enough money to put a down payment on a house without going broke. You need to have enough money to make the tax payment each year. You need to have enough money to replace anything that breaks and general maintenance. The most important thing is to ask yourself if you can successfully pay the mortgage payment each month without any struggle money wise. If you will end up in a money crisis due to the mortgage payments each month then you obviously can not afford the house and you may just end up becoming part of the economy’s statistics.
A Checking Account
One major thing that is important is your checking account. You do not want to bounce any checks whatsoever. This part of financial planning is very important. It will help you prevent any bounced checks as long as you follow a few simple steps like not overspending, making a sound budget, and impulse buying.
If you are married then you and your spouse need to decide on bank accounts. You need to decide whether to have a joint bank account or each have your own bank accounts. Some couples have one joint bank account and both in the couple have a separate checking account for personal spending money.
Financial planning for is important due to understanding at a early time that you need to be prepared. What type of stuff do you need to be prepared for? For example, rent and vehicle repairs and maintenance are a few. It’s a good idea to have an emergency fund of at LEAST $1000 for those unexpected expenditures.
Credit Cards
Another thing is whether you want to use credit cards or not. Some people are anti credit cards and others love credit cards. If you are married then you need to decide with your spouse if you think credit cards are a good idea to use. You need to decide whether or not have enough to pay for stuff that you charge on credit cards. If you or your spouse are impulsive buyers than it’s generally a good idea to stay away from credit cards.
Financial planning is also important in learning how to spend below the amount of money that you make. You don’t want to end up spending more than you can afford each month otherwise you will end up broke.
Affordable
Can you afford a certain purchase? This is where financial planning comes to mind. You need to ask yourself a few questions. Ask yourself can I afford the payments? Can I afford it without being broke? If you have difficult time making the first payment on the item then you most likely can not afford it.
Good financial planning is essential and will do you a world of good. Following your financial plan and wise budgeting will enable you to have more and spend less in the long run. Good luck.