compounding returns: Personal Finance Tips

Having good habits is important for your financial present and future.If you know how to handle your finances well, you won?t end up in debt. Most people don?t realize what a nuisance debt can be unless they have incurred it. The burden of debt is never ending. You have to keep up with multiple monthly billing cycles, entertain creditor calls and have to pay at least the minimum monthly payments if you don?t want your account reported to the credit bureaus.

So, if you are in debt, consider these personal finance tips to get out of debt soon and stay debt free.

Pay the Highest Interest Debt First:?If you have multiple credit card debts, the interest rates are sure to vary. In order to save as much as you can, you should start paying off from the highest interest rate. This process is known as debt avalanche. During the debt avalanche, you pay the minimum amount on all your debts while paying some extra on the highest interest rate. This helps to pay off your highest interest rate debt first. In this way you can save money that went behind paying that particular interest payment.

Pay Cash:?When you are going shopping, especially for groceries, clothes and so on, you should carry cash instead of credit cards. This is because you won?t be able to carry too much cash at a time and thus won?t end up spending much. Also this minimizes the chance of impulse buys, since most of your cash would be spent buying the necessities.

Buy Second Hand:?There is a long list of items that you can buy second hand. In fact, in many cases a passive observer wouldn't even know the items were pre-owned. The list includes furniture, decorative items, and electronic gadgets. Consider online auction websites such as eBay and Craiglist where you can buy such second hand items in good condition.

Inventory What You Own:?For women in particular, clothes are a major expense. It can ?mean huge savings if you find ways to reduce this expense. No doubt there are many items in your closet which you have bought but don?t wear. You should clean your closet at least once every six months and either start using these items or sell them.

Brew Your Own Coffee:?Have you ever thought how much money you spend every day buying coffee at work? Instead of getting your daily latte at a coffee shop, you could brew your morning and evening coffee at home yourself, saving a bundle.

Marie?Lewis is a financial?adviser?for?EasyFinance.com. She brings an exclusive view on personal finance, frugality and nature of consumer financial goods and services like debt loan.


Photo By:?Yomanimus

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