When handling your finances can seem daunting. Consider hiring a financial planner to help you make the most of your money. However, suppose you don’t want to hire an outsider to handle your finances or cannot afford to hire a professional financial planner. In that case, you need to know some financial strategies you can use to control your finances.
Budgeting is an obvious strategy. However, there are more areas in which your financial plans can have a significant economic impact.
Here are five financial strategies every person can easily use.
Vehicle Purchase Strategy
While a vehicle can say a lot about us, the truth is that if you are looking for financial freedom, your vehicle purchase can make a significant difference in obtaining it or not if you are anyone other than a person who can own a car to match any outfit.
Truthfully, your vehicle purchase should be well within your means, as doing anything outside of that can be disastrous for your financial health and credit. Never buy payments. You need to know the final and total price they are charging you.
A typical sales strategy of recent years is to find out what payment amount you can afford and sell you a car with those payments over a period that, when added up, will, in some cases, be up to three times the car’s value. Also, know the interest rate you are being charged.
Pay as large of a down payment as you can handle. If you are in a dire situation where you need to purchase the car immediately, it is understandable that you don’t have a sizeable down payment. However, if you have time, take that time to save to pay as much down as possible.
Do your research on the vehicle you intend to purchase and know the value. Figure the actual payments, know your credit, run your numbers, and be armed with them before you ever walk onto the lot.
Insurance Strategy
Insurance is an unfortunate necessity in every person’s life, and in some cases, having insurance is the law. However, just because it is a must does not mean accepting what you get. It would be best if you exhausted every money-saving strategy at your disposal.
Shop, shop, and then shop some more. With healthcare, vehicles, homeowners, and other insurance that you may need, there is a lot of competition. Therefore, if you are a savvy buyer, you can save hundreds of dollars a year in insurance. And don’t use those sites that say they will impartially compare. You do the research. You make the comparisons. This strategy will save you a lot of money.
Also, take healthy preventative precautions or driver’s education classes to lower your health and car insurance rates. Insurance doesn’t have to break your bank to be excellent and affordable.
10/10/80 Strategy
There are a few percentage financial strategies, but the 10/10/80 is among the most popular and easy to apply. This strategy says to give 10%, save 10%, and spend 80% of your income. This strategy is excellent and straightforward, but at some point, you will need to readjust those percentages to impact your financial future significantly.
50/30/20 Strategy
50/30/20 is another money allocation strategy with a formula similar to 10/10/80. The significant difference is that this strategy has savings built-in, but only after debt is paid. This strategy wants you to be at zero regarding debt before considering saving. It breaks down as follows: 50% goes to bills and necessities.
There is no exception to this allocation. 30% towards paying down debt; once your debt is zero, this percentage would go to savings. 20% goes to wants. This would be anything you pay for outside of bills and necessities or debt relief and savings. This is the lowest percentage on purpose. It would be best to never spend on wants and missing bills or leave debt hanging over your head.
Down Payment Strategy
The down payment strategy was already touched on when discussing vehicle purchases. It doesn’t take a mathematician to understand that your payments and interest rates will be lower if you put more money down on large purchases.
It is suggested that you put down at least a 20% down payment, which is a great suggestion. When implementing the down payment strategy, the most important thing is that you put something down. This strategy can pay off big in the end.
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