46 Tips on Personal Finance
In ‘46 Things I Wish My Mom Taught Me About Money’ Lisa Laprade offers advice “by women, for women” on all aspects of personal finance – from mortgages and insurance to investing and general spending. But there’s no reason why her great list of tips aren’t equally applicable to men… a few highlights:
1. Back to the basics – This means spending less than you earn, and paying yourself first. As long as you save a percentage (she recommends the equivalent of one hour per work-day, or 12.5%) of your pay each month, what the rest is spent on really doesn’t matter.
2. Buying a house – Based on the fact that the seller will give more consideration to a lower bid amount that is already pre-approved by the bank, than a higher bid without definite financial backing, she recommends to get a pre-approved mortgage before you begin house-hunting. Always pay your mortgage first (i.e. before other expenses) and always try to pay more than the minimum mortgage payment. By paying one additional principle and interest payment onto your mortgage balance each year, you’ll knock seven years off the life of your note.
3. Credit and Debt – Right after your mortgage, pay off your credit cards. Not only is the world of compounded interest alive and well, but credit scores affect much more than interest rates. If your score is less than 620, not only will you pay significantly more for mortgages and other types of loans, but also more for your car, life, and auto insurances.
Comments