Without the skills needed to manage your money wisely you will likely need the Credit Counselling Edmonton people rely on to deal with unmanageable debt. Here are four things you wish your parents had told you about managing your money:
Savings: It cannot be stressed enough how important saving money can be for your overall financial management. Savings play a key role in living comfortably and worry free. When you set out on your first job you should manage your money from your first pay cheque and begin putting money away. Whether it is $25 per week or $300, your savings will begin to build providing you with the money you need to:
- Rely on as an emergency fund
- Use as a contribution towards an RRSP
- Use as a down payment on a house
- Use for a major purchase such as a car
- Use for a trip you have been planning
- Meet your financial goals
Remain debt free
Contingency Funds: Savings is one part of your money management; a contingency fund is slightly different. A good rule of thumb is to set aside 10 percent of every major purchase you make that might require repairs. This includes items such as your car, a furnace for your home, appliances, etc. By doing so you will be prepared for repairs when they are required without going into the hole or having to rely on a high interest rate credit card for payment.
Credit Cards: Credit cards do play an important role in your finances as they help you establish your credit rating. As well purchasing items online, securing a reservation, etc will require a credit card. The rule of thumb for credit cards is to avoid purchasing anything with your credit card that you cannot pay off by the time your next payment is due. In other words don’t buy anything you cannot afford.
Household Costs: Last but not least, once you move into your own home never spend more than 30 percent of your pay on your household costs. This will keep you from falling behind and carrying an unmanageable debt that can only be resolved with the Credit counselling Edmonton relies on.
Using these basic money management skills will help you remain debt free while having money squirreled away for retirement or a rainy day.
When you are in need of the credit counselling Edmonton families rely on to help them become debt free speak to Edmonton Debt Free. For information visit Edmontondebtfree.ca.
