Having a credit card and using it the right way is a tricky road to travel. Not many are able to do it perfectly. So, as a result, many of them end up in huge debts that they can’t repay or debt cycles that seem to go on and on. Credit cards come with their own set of advantages and disadvantages. On one hand, they are a wonderful convenience that can allow you to spend without wondering how much cash you have in your packet. But, on the other hand, using a credit card is like moving in a minefield full of things you should never do. But you’re not a financial expert. You can’t expect to keep track of all the finer details of using a credit card. That’s understandable. But what you can do, however, is to avoid some of the glaring mistakes that lead people into a debt trap. Here are some of those mistakes that you need to religiously avoid while using credit cards.
Don’t get too many credit cardsJust because you can, doesn’t mean you should. And one of the things you should never ever do is to get more credit cards than you would realistically need. By piling up cards, you’re simply increasing the chances of finding yourself in deeper debt. How so? The annual fees of all the cards add up to be a financial burden. Apart from that, having a lot of cards can also have a negative impact on your credit score. Surely you wouldn’t want that.
Don’t avoid getting credit cards altogetherIf you are on the other end of the spectrum and you think not having even a single credit card is a good idea, then think again. Sure, not having a card will save you all the additional expenses. But what it would also do is to reduce your chances of being able to secure a mortgage or any other loan down the road. Having a credit card is your single opportunity of building up a credit history. Instead of blowing it altogether, learn to use the credit card responsibly.
Don’t ignore the terms and conditionsThe first step to using credit card responsibly is paying attention to all the terms and conditions that come with using the card. Make it a general rule to read every bit of the document before you sign it. Whenever availing a particular offer, don’t forget to read the fine print. Don’t worry if you can’t make sense of the financial lingo. You can always ask the bank’s representative to explain the terms to you. Reading the terms is an effective way of knowing about any hidden fees that you may have missed.
Don’t shop excessivelyThis is one of the most obvious pieces of advice anyone can give you. Yet it’s also one of the biggest reasons people end up deeper in debt through credit cards. Using a credit card properly is all about self-restraint. You have to realise that owning a card does not give you a free pass. Don’t buy on impulse. A helpful tip is to wait 48 hours after you’ve made a decision to buy the product.…
Lots of people take sabbaticals as a career break or as a chance to do something that they always wanted to do but which would divert their attention completely away from their job. The number one concern at the prospect of a sabbatical is how you are going to manage your finances. No one who lives paycheck to paycheck can survive this.
SavingsThe first thing that you should consider is how you are going to pay for all your needs. The simple solution is to save for the length of time that you are going to be taking leave from work. Most people actually plan for this. They go frugal and save up enough that would last them at least a year, till they find themselves again and either return to their old job or be inspired to try something new. In any case, a sabbatical isn’t wasted, and that should be motivational enough to save for the whole thing.
People with SpousesIf you are currently a dual income family and your partner would have no trouble taking care for the both of you, you can take a sabbatical the very next day. What you do have to make sure of is that you discuss this big decision that you want to take with your partner. You can even talk about how long you plan to take leave from work and that if it is okay with them. This way the other person won’t feel burdened, and the discussion where you get a second opinion would give you strategic pointers on how to go about it.
Income without WorkIt becomes a lot easier to go on a sabbatical if you have a side income, anything that can support you through the time you are not working. A great thing about a steady income your way is that you do not have to spend time saving for the sabbatical before you take it. People take leave all the time and are taken care of by website revenue, dividends from investments, or income from a property they put on rent.
Getting an Emergency FundSo you probably calculated how much food and bills would cost you, what you forgot to calculate was what if there was an emergency. It is difficult to calculate for emergencies. The best way to go about it is to work on accumulating a separate fund for this. Call this your emergency fund and do not touch it no matter what. If you find that you do not need it, you can always make use of it as part of your savings, once you start working again.
Part Time WorkPeople on sabbatical do seek out part time work if they want to. You can do this too; there are so many things you can earn from, such as house sitting, freelancing, minor consultations, baby sitting etc.…
Learning financial management is an important skill that every child will eventually learn sometime in their life. Teaching them to save from a young age will make them feel familiar to the process of managing their accounts and being responsible for the savings they have. Parents have a responsibility to teach their children about these crucial skills so that they can grow up to be responsible adults who are able to make smart decisions on their own. Here are some ways that you can teach your kids to be savers, not spenders.
1. Set a Good ExampleChildren are like sponges—they absorb all what is around them. A home is a child’s first institution, and they learn what they see and observe around the house. If you happen to be a prudent spender and refrain from making bad financial choices, your children will automatically learn that from you and will do so without having you to sit them down and teach them to. Similarly, if you make bad financial decisions, that is exactly what your children will learn.
2. Open a Savings Account for your ChildrenEvery child loves to feel like an adult. Opening a kid’s bank account is a great way to make them feel all “grown up” while teaching them the basics of financial management.
3. Reward Your Children for Saving MoneyOffer small rewards as incentives for your children to save money. When they see that they are getting something out of it, they will be more likely to save in order to achieve that reward.
4. Make It a GameMake savings a fun thing to do. Motivate your kids by making colorful goal charts that show how much money they have saved and how many milestones they have achieved. This way, your child will look forward to save money and feel glad when they have “leveled up” to another milestone.
5. Use CreativityYou can use creative methods to encourage children to save money. For example, if your child wants a new toy, you can assign a jar or envelope to them in which they will save the money that is required to buy that toy. The child can draw and/or write what they want on the envelope or jar. Apart from teaching your kids to be savers, this method will also teach them patience, and the fact that sometimes it takes time to achieve what you need.
6. Let Your Child Make MistakesIf you realize that your child is making a bad financial decision, guide them that it is not profitable, but if they insist, let them make the mistake. When they suffer the consequences, gently teach them where they went wrong. This way, they will make sure never to make the same mistake again.
7. Look Out for Good DealsToday, it is very easy to purchase online, and get some good deals on purchases. For example, if you are about to buy a kid’s pool, instead of buying a brand new one, you can look up for used ones or the ones available in a different brand which gives a better deal. Sit with your kids and let them in with the discussion of which choice will make the best deal.
8. Help Your Children to PrioritizeYou need to teach your child the importance of long-term planning. Have them make a list of things they want, and then ask them to prioritize. This way, they will learn to decide which items to spend money on, and which items to wait for.…
The carefree days of teens are not when you worry yourself sick with money matters. However, before hitting your twenties is actually the time to learn about money, a lot more than spending it on all you wish to fill your closets with. The money lessons are ought to be taught at a tender age so not only to induce saving habits but also to garner a culture of smart spending. Here is what you need to know about money before turning 20: