Start Blog Page 28

Errors in the creation of household budget

You've done it: You've done the hard work of establishing a budget. Now, you plan to keep it on your way to financial wellness.

But how do you handle the "bumps" in your budget when do they appear? Potholes can throw you off the road if you're not careful. However, with a little knowledge and planning, you can avoid budget risks and stay on your way to a better financial future.

Presupuesto (Foto: Pixabay)
Budget (Photo: Pixabay)

Take a look at the following common mistakes in crafting budgets. Once you know these mistakes and how to avoid them, you'll be armed with powerful financial knowledge that will help you make better decisions today, tomorrow, and for years to come.

#1 Budgeting Mistake: Skimping on Emergency Savings
If only budgeted your monthly expenses and not your savings, your budget may be doomed from the start. Life happens when we are busy making other plans, and everything budget reasonable needs an emergency savings item. If you're one of the 39% of Americans who doesn't have an extra $400 in the bank for life's unexpected blips, you'll strain your overall finances trying to break even.

To avoid this mistake budget, make building your emergency savings a priority. Experts recommend an emergency fund of six weeks of your take-home pay, but you can start small to make your savings efforts a reality. Try to set small, achievable goals first, such as $25 for every paycheck or 5% of your income. Then set a savings goal like $250. Once you reach that savings goal, set a new goal.

Budget Mistake #2: Relying on Guesswork
Create a budget using guesses leaves a lot of room for error. A bulletproof budget starts with knowing what the true cost of your living expenses is each month. And sure, it's tedious to sit through all your bills and recurring charges to get exact numbers. Those numbers are the key to a budget that works and grows with your home, your income, your dreams, and your future.

To avoid this error in the budget, take an hour (just an hour) and count all your monthly expenses. Start with your fixed expenses, like rent or a mortgage. Be sure to check your bank and credit card accounts, including the amount of money you take out of the ATM in cash. Just one hour can help make sure your budget be true and accurately reflect all of your monthly obligations.

Budgeting Mistake No. 3: Not Tracking Your Spending
A budget it is not a “set it and forget it” tool. For a budget to be successful, it is essential that you diligently track where your money is going and what you buy each month. If you don't keep track of your discretionary spending, even the small purchases you make for coffee or a snack, you could be wasting your budget.

To avoid this mistake budget, start small. Set a reasonable goal to track your spending for a month. This practice will give you a clear idea of where your money is going. From there, you can make adjustments. You may even consider using budgeting apps to make it easy to track expenses each month. The easier it is to track your spending, the easier it will be to create good budgeting habits.

Read More: Organize your finances through a personal budget

Ways to plan your budget before COVID-19

The COVID-19 outbreak may make you rethink how you manage your expenses and income. Create and stick to a budget it's essential, but there's more than one approach you can take.

Zero-based budgeting is an option if you want to be able to account for every dollar that goes in and out each month. The idea behind this budgeting method is to give every dollar a job. A budget Zero-based can help you avoid wasting money when your finances are turned upside down.

Presupuesto (Foto: Pixabay)
Budget (Photo: Pixabay)

What is a zero-based budget?
A budget Zero-based means that you allocate every penny you receive each month to a specific purpose. Once you've figured out what you need to allocate to cover spending, saving, and paying off debt, you should have zero money left over for the month.

How does zero-based budgeting work?
Zero-based budgeting may seem complicated, but it's actually simple. Every month, you sit down to make a new budget based on income and expenses for that month, allocating each dollar of your budget to a category or subcategory.

One way to avoid overspending with zero-based budgeting is to use cash to cover any discretionary expenses. The amount of money needed to cover things like groceries or gas for the month is calculated, withdrawn from the bank, and then divided into envelopes for each expense. Once you spend all the money in a particular envelope, you won't be able to spend any more money in that spending category for the month. If you prefer to use cashless payment methods, then you would allocate the monthly amounts and track your spending through the app or online.

Zero-based budgeting can give you flexibility during COVID-19 if your income isn't consistent or your expenses change from month to month. Since you start your budget over each month, you can add or remove categories as needed and increase or decrease the amount of money you allocate to your categories, based on your income.

Add up your monthly income
COVID-19 can add a wrinkle to your zero-based budgeting plans if your income isn't what you'd expect. If your hours have been reduced, then you may be making less money. Or if you've been laid off or lost your job entirely, you may be relying on unemployment benefits to cover the bills.

when you do your budget Zero-based, start by adding up all the money you can count on during the month as income. This can include money you earn at your regular job if you are still working and money you have received from a business or side business, plus any form of unemployment compensation you may be receiving.

Compare the total number to your pre-COVID-19 income to see if there is a difference, and if so, how wide the gap might be. This can help you when it's time to start allocating money to cover various expenses.

Add up your basic monthly living expenses
The next step is to find out what you plan to spend for the month. Again, this may seem different from your normal expenses, depending on how the coronavirus pandemic is affecting your daily income or expenses.

Read more: Setting a savings goal can be difficult, we help you do it

Start with your basic expensess of subsistence. These include things like:

Housing, whether it's rent or a mortgage payment, is likely to be your biggest expense, so make sure you budget for that first. Then you can allocate money to cover your utility bills, like water, electricity, or gas, and then move on to food and insurance.

if you have a budget In a tight spot due to COVID-19 related job loss, you may be wondering if you should take advantage of financial relief for housing or utilities. The CARES Act stimulus package, for example, allows many homeowners to temporarily defer mortgage payments. Several states have prohibited landlords from enforcing eviction notices for non-payment of rent during the crisis. And many utility companies have agreed to suspend disconnections for unpaid bills.

 

Things to consider before taking out the credit card

With more than 20 million people filing for unemployment recently, paying the bills is a struggle for many. And if you don't have an emergency fund, you can resort to other options to make ends meet. If you've lost a source of income or can't pay your bills, the opportunity to get a cash advance with your credit card may also be a viable option. But it is? This is what you should think about before resorting to plastic.

What is a credit card cash advance?
A cash advance is money that is borrowed from your credit limit. credit card, instead of your bank account balance. If you have a PIN set up for your credit card, you can withdraw the money advance from an ATM. You can also go to the bank with your card to request a money advance.

Tarjeta de crédito (Foto: Pixabay)
Credit card (Photo: Pixabay)

Get a cash advance with your credit card It does have some advantages: It's quick and easy to get, it doesn't require you to have money in your bank account, and there's no approval process either. Unlike a loan from a bank, you do not need to go through a credit check or present any documents.

Cash advances aren't as bad as payday loans when it comes to interest rates, but that's not collateral. Payday loans are notorious for their exorbitant fees. For two-week loans, interest rates can range from 390% to 780% APR. Short-term loans have an even higher APR. Rates are even higher in states that do not cap the maximum cost.

Credit Card Cash Advances: The Disadvantages
The benefits of a credit card cash advance pretty much end here. The quick fix has consequences.

Additional charges
Your credit card issuer will likely charge you an additional fee (typically $3% to $5% of the total up front, with a $10 minimum), he says. And if you use an ATM that's not affiliated with your credit card, you'll rack up even more fees.

Read More: Application to learn to knit crochet online

We see that many borrowers carry the amount they owe on the card considerably after a cash advance, eating up available credit and putting them at risk of additional fees and larger monthly payments.

It could affect your credit score
Understand, too, that adding to the balance of your credit card it will increase your credit utilization and work against your credit score. The higher your credit utilization, the greater the negative impact on your credit score, since your amounts owed account for 30% of your score.

There is no safety net if your money is stolen
You are out of luck if your advance money is lost or stolen. You don't have the safety net that you would if there was an unauthorized transaction on a credit card.

Understand some details about a joint credit card

 

When a couple opens a joint credit card, the card issuer considers the credentials of both to decide whether to approve them. And both partners share ownership and legal responsibility for the card. This is very different from when one partner is the primary cardholder and adds the other as an authorized signer who can use the card but has no formal legal obligation to pay the bills.

If you are considering opening a joint credit card with your other half, there are a few things to think about before moving forward.

Tarjeta de c´redito conjunta (Foto: Pixabay)
Joint credit card (Photo: Pixabay)

Are joint credit cards a good idea?
The joint credit cards they can make sense if you trust your partner and both commit to spending responsibly and paying promptly. Some of the benefits are as follows:

A joint card makes it easier to manage money. If you and your partner share other expenses or have a joint bank account, it may make little sense to have a separate credit card, as this means two bills to pay and a choice over which card to pay first if both cannot be paid on your whole.

qualify for a joint credit card it can be easier. The card issuer assesses the financial situation of both partners when opening a joint credit card. Since your combined income is likely to be higher and the card issuer has two people who promise to pay, creditors may be more willing to give you a card or extend a higher line of credit. If one partner is having a hard time getting credit because of their low credit score, applying jointly with a partner could be key to making approval possible.

A joint card could add to a partner's low credit score. If one partner has a lower credit score or no credit history, approval of a joint credit card and its responsible use could be a great help.

Both partners share the legal responsibility for payments. If you add a partner as an authorized user, they can use the card but are not liable to the creditor for payment of the debt. As the primary cardholder, you risk getting the entire account. This can't happen when you have a joint credit card.
Read More: 5 things to consider before sharing a credit card

There are also some serious drawbacks to a joint credit card

-Both partners have the legal right to use the card. While you can remove your partner as an authorized signer, you cannot remove a co-borrower from a joint card. Your partner could legally use the card to increase the bill, and you would share the responsibility for payment.
-A breakup can lead to big problems. Your partner could use the card to harm you financially by charging you a fortune that you have to pay back. You may also have to close the card, since you usually can't remove a co-borrower and closing the accounts could hurt your credit score.
-Not all card issuers offer joint credit card You will have fewer choices about which cards to apply for if you want one joint credit card with your partner.

=

Ways you can use your credit card to invest

Every time you use your credit card to invest, keep an eye on your credit account for any questionable transactions. If you notice anything suspicious, report it to your card issuer immediately.

Safer ways to invest using a credit card
Buying stocks with your credit card is risky business, but that doesn't mean you can't use your credit card to help you profit from the market. There are safer ways to do this that do not involve the direct purchase of shares. Instead, you can tap into your credit card to increase funds.

Tarjeta de crédito (Foto: Pixabay)
Credit card (Photo: Pixabay)

Use an investment app
Investing apps like Acorns and Stash are a great way to use your credit card to start building your investment portfolio. For example, Acorns allows you to link your credit card to a round-up program for every purchase you make and offers a "found money" feature that earns money when you shop with an Acorns partner. There are a variety of similar investing apps that you can easily use from your phone to help your money grow safely.

Read More: How to turn a photo into a 3D drawing online with a free app

Open a credit card that invests in rewards
While many rewards cards earn you cash, points, or miles that you can use toward future purchases, some Credit cards They offer the option of depositing the rewards into an investment account.

Invest your cash back rewards
If you already have a cash rewards card, you can request your money back in the form of a check or deposit. Your issuer may require you to meet a minimum amount, such as $25, before you can receive a check or deposit, which you can then use to finance your own investments. Consider opening a brokerage account with low fees and no minimum deposit that you can add as you earn.

Conclusion
When stock prices are low, it's a great time to invest. However, it is important to do so responsibly and carefully. Although it may be tempting to buy stocks with the credit card, doing so is also very risky and could lead to fraud. It is wiser to take advantage of your credit card in other ways to earn money from your spending, such as using cash back rewards to invest or connecting your card to an investing app.

1...272829...52Page 28 of 52
© Copyright 2020 - Developed by HBA Web Design