When it comes to managing personal finances, many of you are clueless. You often do not know the right way to be on the right track. People often hold low income responsible for their poor financial situation.
However, this is not the case all the time. You come across a lot of advice to improve your financial situation, but you realise the persistence of danger when it is already too late.
Since online lending has made it easier and more convenient for you to borrow money, you often find online loans in Ireland as a solution to every problem. Although online lending aims to help you tide over during emergencies, it does not mean that you will not brace yourself for a rainy day. This blog discusses financial rules that you, more often than not, ignorantly ignore.
Not using cash
Having plastic cash is more convenient to use, and you can also earn a lot of rewards. This might be a reason for ditching cash. Once the bill is generated, you will pay it off. One of the drawbacks of using plastic money is that you slip up, taking into account your budget.
You cannot hold responsible for your low income if you are spending more than your capacity. The use of plastic money occasionally can help you build credibility, but never stop using cash. If you have cash with you, you will have an accurate idea of how much you want to spend.
Not reviewing your credit report regularly
When you apply for a loan, a lender will peruse your credit report to know your previous payment records. A good credit score builds your credibility and a poor credit rating calls your credibility into question.
Sometimes your credit report may reflect wrong picture of your finances because of reasons like identity theft. A rule of thumb says that you should review your credit file periodically. You can get a copy of your credit report once a year for free.
Do not fight shy of checking it because it may have some errors like no information of your past timely payments. You can ask credit reference agencies to remove the flaws if any.
Not researching the market
One of the significant mistakes that most borrowers do is they do not research the market to get competitive interest rates. Of course, you will not have time to research when you need money, but you should do this task in advance.
Update yourself about the market so you do not catch up with a lender that charges outrageously high-interest rates. Various online lenders are offering the same type of loans at different interest rates. Ensure that you have researched prepayment penalty, processing fees, APR, interest rates, and the like.
Appreciate what you have
You have seen your friend with a new car, so you may be tempted to own a new one. You may also have a habit of impulse buying. You should ditch these bad habits. It does not make sense to keep up with the Joneses because your individual circumstances are different.
It is crucial to be satisfied with what you have. You should buy things when you need them. You should not buy them when you do not need them or just because your friends have that.
You should set financial goals to shape your life. Set both short term and long-term goals. Make sure that you make effort to achieve those goals. Keep tracking them because it will help you know where you were and where you are and how long it will take to reach your desired destination.
If you are making progress, this will keep you motivated. This motivation will help you feel more encouraged not to spend your money recklessly. By tracking your goals, you can determine where you have to fine-tune.
If you want to have a good financial life, you should strictly follow the rules mentioned above. Analyse your financial condition and never spend more than your capacity. Stop comparing yourself with others. Just do what it needs to improve your financial circumstances. Set goals in your life and make effort to achieve them. Borrowing money is not a bad idea but you should never borrow money to fund your regular needs.