Wednesday, September 20, 2017

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You learn many things at school, but for some reason, it seems like we are never given practical information regarding how to understand, control and maintain our personal finances. It can feel like you reach adulthood, take on a job, are handed cash and are completely left to your own devices. This is relatively daunting, and an enormous consequence is that many people continue through adulthood and find themselves with mortgages, loans, and credit agreements while still not truly knowing the basics of lending and repayments. It’s not all too surprising that so many people slip into debt and even bankruptcy on such a regular basis. So, let’s take it back to basics. Here are the first steps you should take towards handling your personal finances effectively and problem-free.

Know the Value of Your Income and the Cost of Your Outgoings

As well as being aware of your credit score, you should know exactly how much money you have coming in and how much you have going out. You need to keep the first number larger than the second or your chosen lifestyle will plunge you into the red in no time at all. If you find that your outgoings exceed your income, it’s time to start cutting back on your spending. This can easily be done by setting out a budget which limits social activities and opts for cheaper brands or brandless products than you currently purchase.

Know Your Credit Score

First things first, it is essential that you know your personal credit score. It is essential that you engage with credit to be offered larger loans, such as mortgages or loans for vehicles, in the future. This essentially ensures that lenders know you can be trusted with repayments before handing you a lump sum of cash. Many credit score sites are now free to use, meaning that you can access your records free of charge and gain a thorough understanding of your finances. Most will also have a meter, rating your situation from poor to great. This will then give you an idea of what moves to make when it comes to applying for credit or finance.

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Know Who to Lend From

When building up your credit score, you should take out the best credit card or loan for your needs. You should look for the necessary credit limit as well as low-interest rates and reasonable repayment costs and intervals. Finding this information out is easier than ever. You simply need to check out GoBear credit card comparison, which will filter the best results to suit your credit rating and needs.

Consolidating Debts

If you already have debts, it may be time to consolidate them. This essentially means that you take out one large loan to clear all of your cards and then pay back the one source. This simplifies things, as you will only have one lender to remember, one repayment date a month to bear in mind and perhaps even a lower interest rate than you are currently being offered on your cards. Perfect!

This simple steps will give you a more clear overall view of your finances, allowing you to make more informed decisions and save yourself stress and cash in the long run. So get started today.

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