Gain Financial Security with These 6 Tips

No matter how financially confident you are, it always helps to have good financial habits. In this article, we will outline 6 practices to help you stay financially healthy, or help you get started building your financial health. You should always start by taking a look at where your money is going. Whether it be bills, rent, mortgage, or entertainment, it’s a good idea to take a realistic look at your spending habits.

1. Pay with Cash – Try and avoid paying interest on a purchase. This can increase the actual cost of an item dramatically, so unless you are paying off credit card debt in full each month, save up first and pay in cash when making a purchase. Play a savings game with yourself, and when you reach your goal, reward yourself with that major purchase!
2. When others panic, buy - With every financial crisis to date, the market sags. Late 2008 through early 2009, with a 43% drop in the Dow, was a great time to load up on long term investments. If you can afford it, building up long term investments in times when others are panicking is a great thing to do!
3. Debt can be dangerous - Credit is a valuable tool, but it must be used sparingly. This is where many people dig themselves into deep financial holes. If you are maxing out your credit card, you are spending money you don’t have, and will have to pay back plus interest in the long run. To avoid this, pay off revolving debt and cut up credit cards. If you do decide to keep cards, make sure you are paying off the credit debt in full every month. Many financial experts recommend having no more than three cards to be used only for emergencies.
4. Your home is your shelter, not an investment - Home prices can rise and fall, like any other assets. Don't expect appreciation in the value of your home to be a substitute for retirement savings in traditional investments. If the value of your home does go up, treat it is an exciting bonus – this is never something you should rely on. Remember, always start retirement planning early, and consider long-term care insurance.
5. Manage your paycheck - More than 70% of Americans overpay their taxes each year. While a tax refund is nice, it's even nicer to earn interest on your money by putting it into an interest-wielding account instead of giving the government a free loan. Check your withholdings with the Form W-4 Assistant at paycheckcity.com. If you’re not happy with your withholdings, you can change them at any time. Do you really want to give Uncle Sam have a free loan? At paycheckcity.com, you will find the tools to put this money back into your pocket.
6. Do not live beyond your means – Even though a night out on a yacht might seem within your means because your friends are doing it (or posting about it on social media), it is never a good idea to live beyond your means. You should always put a portion of your paycheck into a personal savings account, and be continuously contributing to your retirement savings. Avoid living paycheck to paycheck by finding ways to spend less than what you’re bringing home. Although the process of getting out of this vicious cycle is long, it’s worth it in the long run, and your overall finances will slowly improve.