Tips for Making Better Financial Decisions


Whether you’re struggling to pay off a debt, provide for your family, or hoping to save a large nest egg for the future, it’s crucial to learn how to manage your money. Consistently buying something as soon as you earn some funds or spending more than you make can put you on a negative path of being behind on your bills or worse, being chased by collection agencies. Adopt a few money wise habits to ensure you’re making daily decisions that will have a positive impact on your finances in the long run.

Set Goals

By setting goals for your financial savings, you’re more likely to stop overspending. Depending on your age, you may be prioritizing for a vacation, a new home or your retirement. Use a budget calculator and select how much you’ll need and the timeframe to determine how much you should put away each month.

Create a Budget

Once you’ve uncovered how much you’d like to save and how much you earn after taxes, create a monthly budget breakdown to ensure you can stick to it. Be sure to account for your fixed expenses first, then add in your variable costs – such as groceries, meals, and gas -- and leave a small percentage for emergencies and recreation. If your expenditures are more than your income, you’ll need to cut from the variable costs.

Borrow Wisely

When you find yourself in debt or want to make a large purchase, you may be tempted to take out payday loans or borrow money from a friend or lender. Ensure that you’ll be able and willing to make the payments with interest or that you won’t be putting yourself further into debt if a loan comes due and is deducted directly from your paycheck. Also consider any added fees or penalties in the event you’d like to pay the loan off early or if you miss a payment.

Research Purchases

If you’re planning on making a major purchase ranging from a big screen television to a car to a new house, be sure to research the options thoroughly. Avoid rushing into the sale, allow yourself to find the model with only features that you truly need, consult user and expert reviews and consult your budget to determine whether you can afford the price. Be sure to sleep on the decision and possibly discuss it with someone you trust to be sure it’s a good deal.

Reduce Impulse Spending

When you’re on a tight budget, every little bit counts. Heading to the drive through for a cup of coffee each morning can make a dent in your long-term savings over time. Going to the mall and buying a few new outfits for an upcoming vacation is an impulse buy that you might not be able to afford. Be sure you’re accounting for each purchase – no matter how seemingly insignificant – to ensure you don’t torpedo your ultimate goals.

Although you may be earning enough money to make ends meet, this doesn’t mean that you’re immune to falling into debt. If you’re worried that one medical or household emergency will put your bank balance in jeopardy, follow a plan to encourage yourself to make prudent spending decisions and positively impact your financial future.