Are your personal finances ready for the unexpected?

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Simplifying your personal finances is not just consolidating your bank and investment accounts or automating your personal finances to make them easier.  A key step toward simplifying your personal finances is to prepare your finances for the unexpected things that can occur in your life.  Don’t say it will never happen to you. You never know what can occur. Its always better to be prepared than unprepared.  Being proactive and prepared is necessary to simplify your personal finances.

Having a plan in place to handle any financial emergency will enable you to take immediate action when the unexpected occurs.  Instead of  spending your time wondering what to do, you will already have a plan of action so you can spend your time  and energy executing instead of planning.   Being prepared you usually will spend less time dealing with situation as well as spend less money.  Its also better to plan ahead when emotions will not influence your decisions.   Having a plan in place to deal with the unexpected will help you simplify your personal finances and enable you to be financially prepared for whatever is presented to you in your financial life.

Here are 5 things you should put in place to prepare your personal finances for the unexpected as well as help you simplify your personal finances:

Emergency Fund – you never know when something will happen. Having a well established emergency fund can really help you simplify things when the unexpected occurs.

Proper Insurance -having adequate insurance to cover medical needs, natural disasters, and property damage will help you reduce the financial impact on your personal finances.   If not insured properly you may place yourself in a financial bind.

Multiple income sources – having additional income sources, you can handle a sudden job loss or other financial impact easier.

Job loss plan -a must have even if you feel your job is secure.

Death plan – have a will in place as well as life insurance will help your loved ones manage your finances upon your death as well as make sure your family is taken care of even if you are not there to help.

ACTION STEP

Take action now by reviewing your current personal finances and determine which of these plans you do not currently have in place.  Then develop a plan to make sure your finances are prepared for the unexpected.  At minimum you should have an emergency plan and proper insurance in place.

What have you done to prepare your persona finances for the unexpected?

Remember to take one step at a time to develop a simple financial lifestyle so you can live the financial life you always dreamed of.

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Simple Personal Financial Tips – Avoid Overdraft Fees

Having to pay overdraft fees on a regular basis is a sign that you need to simplify your personal finances.  Seeing those overdraft fees charged to your account tells you that you are not managing your finances properly. Making some minor adjustments to your finances can help you prevent those overdraft fees as well as help you simplify your finances.

Here are some tips to help you avoid those overdraft fee:

Pay with Cash - this way you only have to monitor your cash withdrawals. Suggest withdrawing enough for your weekly expenses. This eliminates the need to keep track of every debit you may take out. It also let you know there is no money if you don’t have any more cash.

Set alerts on your account – this lets you know your account has reached a minimum balance that you have established and you need to either make a transfer or deposit.

Set up overdraft protection on your accounts – in case you forget to make that transfer having overdraft protection will make sure you are not charged the overdraft fee and your check or debit is covered.

Use credit cards instead of debit card – only suggest if you will pay off your credit card off at the end of the month. Using a credit card will eliminate the need to monitor your account balance daily because you will have less activity in your deposit account.

Monitor your account balance regularly with online banking – this will enable you to know what transaction have occurred and how much is in your account.

Establish an account buffer – this provides some room for error if you forget about a transaction or forget to make a transfer.

ACTION STEP
Take some action now by implementing at least one or more of these tips to help you avoid those nasty overdraft fees. By implementing one of these tips you will save enough to have a nice dinner at the end of the month. Considering overdraft fees can cost you as much as $35 per occurrence. Just two fees will equal a nice dinner and a movie. So be sure to take action now it could lead to nice end of the month date with your loved ones.

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Til next week take one step at a time to simplify your personal financial life.

Signs you may need to simplify your personal finances

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How do I know if I need to simplify my personal finances? What should I look for to determine if I need to simplify my finances? Some signs stick out like a sore thumb while others are not so obvious. Here are some signs that are good indicators that you need to simplify your personal finances.

1. Going to your bank to deposit or cash your payroll check
2. Wondering at the end of the month where all of your money was spent.
3. Not taking advantage of employee benefits
4. Not having a will in place – this one is not for you but your loved ones.
5. Regularly paying overdraft fees
6. Monthly paying late fees on your bills
7. You are charged service fees on your bank accounts because you did not maintain sufficient balances
8. Not automating your monthly bills
9. Multiple investments accounts with similar assets
10. Not opening your monthly bank or investment account statements because you have some many
11. Carrying more than four credit cards in your wallet
12. Paying the minimum balance on your credit cards
13. Using multiple spreadsheets to manage your finances
14. Still writing checks to pay your monthly bills
15. Not establishing financial goals and objectives
16. Receiving monthly paper statements
17. Not saving money
18. Not establishing an emergency fund
19. Using the bank teller to withdraw money
20. Calling your bank to find out your account balance

If you find yourself doing several of these you need to simplify your personal finances.

Simple Personal Financial Tips – the Car Purchase

The purchase of a new car be it new or used will have a significant impact on your personal finances. We all do it at least once in our lives so make sure you ask yourself the right questions before you make your next car purchase. Asking the right questions prior to your purchase can help you simplify your personal finances.

Here are some tips to help you simplify your personal finances when you decide to make your next car purchase.

Don’t buy more than you can afford
– Know how much you can afford before you even begin looking for a car. Review your budget and determine how much you can afford. The best situation would be to pay cash or put a significant down payment so the purchase would not significantly impact your monthly budget.

Don’t buy more car than you need – Do you really need a eight passenger SUV? When you are single or only have a family of four. Probably not. So buy the car that fits your needs so you are not paying for more car than your really need.

Buy for the long term – When you decide to purchase a car, purchase the one that you will get at least ten years usage or more. Don’t buy a new fancy sports car when you know you will probably out grow it within two years.

Know your credit score – this will impact the financing of your car. If you have a low credit score you will end up paying a higher interest rate if you finance your car which will ultimately impact the overall cost of your car. So its always best to know what your score is before you purchase a car. This way you are not surprised when they tell you your interest rate.

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Til next week take one step at a time to simplify your personal financial life.