By Julie Jaggernath
No matter how you look at #theDress, whether you see #BlackandBlue or #WhiteandGold - the real question is does it fit your budget? Before you pull out the plastic and make an emotional rather than a financial choice to part with your cash, here are 4 smart money management tips that are black, blue, white and gold. You can also think of these as 4 key factors of good money management.
|The look of the original dress minus the jacket. Source: Roman Originals||
Tip #1: Keep Your Budget in the Black
Use your budget as a plan to keep you in the black. “In the black” means that you aren’t spending more than you earn. It means that you set money aside for emergencies and irregular expenses. Living on a budget means that you plan how to have the money you need when you need it. Many people think of a budget very negatively. In reality, a budget gives you the freedom to plan what you can spend, rather than what you can’t.
Tip #2: Pay Down Debt to Avoid Feeling Blue
Spending on a lifestyle you can’t truly afford will catch up with you eventually. Smart money management always means paying down debt and keeping how much you owe in check. This also means that if you need to apply for a personal loan, mortgage, line of credit or credit card, you’re more likely to get approved than if you have lots of debts and owe more than what’s reasonable for your level of income.
If you already have more debt than you can manage and the stress and money worries are getting you down, there is help available. Feeling blue makes it really hard to consider your options objectively, so ask a professional credit and debt counsellor at a non-profit credit counselling agency to review your situation with you. They’re there to help you and what you talk about is confidential, so feel free to ask them anything. If they can’t help you, they’ll know someone who can.
Tip #3: Don’t White Out the Savings Account Category on Your Budget Spreadsheet
When you’re just getting by day-to-day, it can be very tempting to ignore, or even white out, the savings account category on your budget spreadsheet. But don’t. Some of the smartest tips about managing money come from those white collar folks who seem to have endless amounts of money. However, the Warren Buffets and Bill Gates of the world didn’t start with big pay cheques. They learned early on that saving money and investing it wisely leads to endless opportunities.
The original photo posted by SWIKED / TUMBLR
Take a page from them and don’t wait to start saving until you have “extra” money. That will never happen. Start setting money aside today and think of it as your personal bank of opportunity!
Tip #4: Don’t Think of Your Credit Card as a Pot of Gold
A credit card isn’t free money or a magical pot of gold. Avoid using credit cards to pay for daily living expenses. Save them for planned purchases and emergencies and set money aside in your budget to repay what you owe in no more than 6 months. Ideally you want to pay your credit cards off every month by the due date, but when you can’t, save on other expenses to pay them off as fast as you can.
There’s a popular myth that you need a lot of credit to get a good credit rating or credit score. The truth is that using credit wisely and keeping your limits within what is affordable for you is what will get a good credit rating. So avoid the lure of a shiny piece of plastic and only use your credit card to pay for what you need, rather than what you want.
Smart Money Management Will Keep You (and Your Budget!) Looking Good
The online debate about #theDress wasn’t just if it was #BlackandBlue or #WhiteandGold, but also how it looked. Things aren’t always as they seem so to keep yourself and your finances looking good, smart money management is the way to go. Create a budget that keeps you in the black, deal with your debts so you don’t feel blue, fill in rather than white out the savings category on your budget spreadsheet, and don’t think of your credit card as a magic pot of gold.
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