personal finance topics to consider

Two key personal finance topics to consider on your way to financial freedom

Charles
Charles

What are some personal finance topics to consider?

It’s every person’s dream to be financially free. Here are some personal finance topics to consider. We all want the freedom to do what we like, and when we like. We don’t want to be tied down by money worries. But how many of us are actually taking control of our finances?

While it may seem difficult at first, there are ways that you can reduce your expenditure and manage your debt to make this a reality! Here are two personal finance topics to consider on your way to financial freedom: reducing expenditure and managing debt.

Reducing Expenses

Do you find yourself spending more than you earn? If so, it’s time to start looking for ways that will help reduce your expenses. You can do many things to cut back on costs without sacrificing the quality of life you enjoy.

Here are some tips:

Analyze your monthly income and expenditure by using a simple budget spreadsheet or calculator. This way, not only can you see where all those pesky dollars go but also how much money is left over to save or invest.

Cut out expensive lunch breaks at work. Instead opt for cheaper options such as fruit or a home-packed meal, which costs a fraction of the price.

Make small changes to your lifestyle that will make a big difference in the long term. Such as shopping for clothes and food when retailers have discounted sales periods. Or consider shopping in bulk when buying groceries. 

These are just a few examples of things you can do to bring down your expenses. The key in expenditure management is understanding that we need to make certain sacrifices in life for future rewards. The success of your expenditure reduction will depend on your ability to prioritize necessities over luxuries.

Personal finance topics to consider

Reducing expenditure is not an easy or pleasant process. However, it does help with lowering financial stress. If you can keep expenditure low while boosting your income, you’d be surprised with your surplus. Which you can then save, invest or spend travelling the world.

The the recipe for wealth is not a long one;

  1. spend less than you make
  2. Invest the difference
  3. Stay consistent

Managing Debt

Debt is like a snowball that will continue to grow and become more brutal and challenging to eliminate. So many people have fallen into the notorious debt trap. If you are one of them, don’t worry! You’ll make it through and learn how to avoid the same mistakes in the future. 

If you have credit card debt, it’s crucial to figure out how much interest you’re paying on the balance every month. One of the most common mistakes people make is using credit cards for purchases. Credit card companies are usually lenient when it comes to borrowing. There can be temptation to use them more freely than other forms of debt. Then paying off what you owe later with interest rates as high as 20 – 30%. You should review your credit card statements every month. And make an effort to pay off the balance before it charges an additional interest. If this is not possible because of other monthly expenses like rent or food, then try transferring what you owe onto a lower rate plan, reducing your monthly payments.

Another option you might consider debt settlement programs where a debt settlement company settles your debt with the creditor. They then offer you a more realistic payment term, based on what you can afford to pay.

Is debt a personal finance topic that haunts you?

If you are struggling with debt, it’s important that you find out about your credit score and make an effort to improve upon this number through things like paying off loans on time or making purchases in cash rather than using a credit card.

Some people look to eliminate their debts by using something called the Debt Snowball Method. This involves listing all of your debts (including those with lower interest rates) in order of balance size – smallest first, largest last – then tackling them one at a time. Adding as much money as possible onto whichever is next up on the list until they’ve paid everything down.

We’ve discussed tips on how to reduce expenditure and information about managing debt. However, remember that your focus needs to be on maximizing your income and limiting your expenses. All while growing your assets and keeping tabs on your liabilities. Sound financial management and hard work are a recipe for success. If you’re interested in becoming financially free, then these are just some personal finance topics to consider.

Charles
  • Currently located in China, teaching English and working towards Financial Freedom. I write about money, travel, personal development and more!

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