Everyone has something to say when it comes to managing your money.
Some of these seem okay on paper, but in practice are hard, like “Put 10% of your paycheck into savings.”
Others get into the more nitty-gritty of credit cards and loans, like “Pay down your highest interest debt first.”
Why does everyone have something to say when it comes to your finances?
Because it’s important, and people want to help you with such a fundamental part of our society and existence.
But WHY is it so important? What does appropriate financial management bring you?
Peace of Mind
Too many Americans worry about putting food on the table or keeping a roof over their heads. Many more worry about their children’s future and whether they’ll be able to help pay their college tuition.
These things can cause severe anxiety and stress, keeping you up at night and leaving you feeling exhausted by the weight of it all.
You don’t have to live like that though.
Proper finance management can help your peace of mind in the following ways:
No More Overdue Bills
With a proper budget in place, your credit card and loan debt will begin to decrease. It also means you’ll know exactly how much you need to pay every month and when.
It can make what can feel like an overwhelming amount of overdue statements into something tangible and manageable, and you can build a plan to tackle it.
That means no more calls from collections, or threatening letters demanding you pay.
On top of that, your credit score will begin to improve, and you’ll likely find you have more breathing room when it comes to your essentials, water, electricity, groceries, etc. than you thought.
You can sleep easier knowing you have your bases covered and with no fear of where tomorrow’s meal is coming from.
Building a Savings Account
Many parents want to save for their kid’s college tuition, but it feels impossible when you’re living paycheck-to-paycheck.
Emergencies can happen too. It’s an unfortunate fact of life. And most people live in fear of the financial burden these emergencies can cause, and hope the next one doesn’t sink them.
With a nice cushion in savings, however, that burden is eased tremendously. You don’t need to pull out a loan just to pay for medical debt.
You don’t need to saddle your kids with student loan debt.
You’ll be able to confidently move forward knowing you are prepared for anything the future throws at you.
Pay Off, then Avoid, Debts
Debt, as a general concept, is unavoidable. Buying a house or a car technically puts you into debt if you don’t pay the full price upfront.
However, these debts are different than credit card or personal loan debt. The former is expected long-term loans, while the latter has shorter terms and a more immediate impact on your credit if overused.
When money gets tight, people tend to start to put charges on their credit cards to try and maintain their quality of life. Unfortunately, that just makes the hole of debt deeper and harder to dig out of.
Managing your finances can help you pay off any of this debt you’ve accrued and prevent you from taking on any more.
With these high-interest debts paid off, you can breathe a sigh of relief knowing that more money can now go to your savings.
Better Standard of Living
Financial management isn’t just about securing your financial needs. It’s about increasing your quality of life for you and your family.
Have you ever thought about what your life would look like debt-free? Take a moment and picture where you are right now, then picture what could be.
Sometimes we think we’re always going to be stuck where we are, but that isn’t the case.
You don’t want to go overboard and increase your spending to match your new cash flow, but enjoy some luxuries you might not have been able to afford before.
Buy fresh and local ingredients. Make that repair you’ve been saving up for. Get some higher-quality clothes that you don’t need to replace as often.
It’s these tiny improvements that can make a world of difference in how you live your day-to-day life.
Most people look forward to the days when they no longer need to work and can spend their golden years pursuing whatever passion they desire.
Very few people want to work their whole lives, but it’s becoming more and more of a reality. Savings begin to run thin, or Social Security isn’t enough, and many retirees go back into the workforce.
This doesn’t have to happen. The younger you learn to handle your finances, the better position you’ll be in when retirement is around the corner. Enjoy the sun, beach, or mountains knowing you’ve put yourself in the perfect position to relax the rest of your days.
It also eases the financial burden on your family should you need additional care as you get older. With proper planning, they will never need to agonize on how to pay for any help you may need.
In this day and age, it can feel like you’re shackled to working long hours in potentially poor working conditions just to save up for a down payment.
Even if you save up on the down payment, your credit score makes it impossible to buy a house. It seems like no matter how hard you work your dreams are just out of reach.
These dreams don’t have to stay as dreams; they can become reality with proper finance management. With a budget, a goal in mind, and a motivated attitude, you can:
- Buy a house with your new and improved credit score.
- Go on that vacation you’ve always wanted to go on.
- Get that brand-new car you’ve been eyeing.
It’s not easy. You can’t wave a magic wand and suddenly things are better overnight. But with hard work and determination, you can reach any financial dream.