The global recession has left a lasting effect on everyone’s life. During this recession while some people lost their jobs, some experienced salary cuts. Overall production, income, corporate profit, investment expenditure of the economy reached an excessive low. So, it is very natural that the economy will take some time to recover even in the post-recession period. In order to ensure that you face no more hardships post-recession, it is best to improve your personal finance. Here are some tips that you probably already know, but it pays to revisit them one more time.
- In order to improve your personal finance the first thing you need to do is repay your debts. Among all your loans, choose the unsecured and expensive ones and pay them off first. Unsecured debts like credit card debt, personal loans need to be paid off first as they generally carry high interest rates. For repayment purpose you can use your extra cash or you can use your savings which earn an interest rate lower than the rate of interest payable on your loans.
- Try to create an emergency fund. Even a small emergency fund can offer you great help in the time of difficulties.
- In the post-recession period, you need to make a strict budget. You should make a thorough finance plan and you should follow it religiously. Record all your expenses and match the monthly spending with your monthly income. Try to create surplus that can help you in debt repayment.
- Aim at some quick cutbacks. Try to reduce your expenses by buying only those things that you seriously need. You can save some money on food bills by buying food in bulk. Before going to shop for groceries make a list of the items that you need and stick to the list when buying. Try to avoid buying the things that are not on the list. You can save some bucks on electricity bills by switching off the lights when you aren’t using them.
- Think twice before buying any luxury item like a big television or brand new music system. Try to avoid any long term hire purchase agreements. For large purchases, try the 30 day rule.
- Start using debit cards or cash for making different payments. By using a credit card you unknowingly spend more. So, try to avoid extensive uses of credit cards. Use credit cards when it is only utmost necessary.
- Eat out less. Enjoy your home cooked meal. It not only saves a lot of money but also is far healthier. You can save some bucks if you avoid the gym and start exercising at home.
Some people go shopping just for fun, but it’s actually quite fun to window shop too. The difference, of course, is that you get to keep more, and vastly improve your finances.
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All suggestions are practical and applicable. Moreover, besides paying attention to expenses, we can search for new ways to earn money, for example out of some extra skills we have, hobbies.
I agree with the above: I rarely buy things from places not called ebay and craigslist. You get the same product for much cheaper.
I agree with most of the other comments, these are good suggestions to repeat. Things seem to be getting better but unemployment is still high these days.
One thing I would add is to use the power of the internet in both buying and selling. If you need things, you can generally find things cheaper someplace online, such as craigslist. Also, sites like ebay and craigslist are great places to get rid of that stuff you are not using anyway.
Great post. At this point in my financial journey, I’m trying to create an emergency fund while cutting expenses simultaneously. I definitely eat out less now that I cook at home more often.
“The global recession has left a lasting effect on everyone’s life.” I don’t think that statement is necessarily true… I think those that were already frugal and back to basics, and those who were conservative in their investments, really felt little if any effect at all …. except the doom and gloom heard on the news channels if they had TV.
That’s not to negate that a lot of people probably were affected – but no, NOT everyone.
And about that 30 day rule… try a 6 month or 1 year rule… it works a LOT better – plus usually you will find the item on sale, on clearance, at a huge discount, or find that you don’t need it at all 🙂
Great tips as usual. I third the idea that credit cards are useful if you are responsible. When you can get 1-2% back every time you pay, why not?
Great advice. I too, use a credit card (Amex Blue), which offers cash back once a year. If you’re able to pay off the balance every month then there’s no reason you cannot use one. =)
You can’t hear these tips too often. Still, I wonder how many people really feel like the recession is over. Corporate profits are definitely bouncing back, but employment is not and wages are actually starting to fall a bit.
These tips are great ideas at any point in the economic cycle, although I must say I disagree with you a bit on the credit card thing. A very disciplined credit card user can actually make them work to their advantage through planned spending and reward dollars. If you are not a disciplined credit card user, then I would agree that cash is better.