9 Solutions to Crippling Personal Finance Issues

There are endless financial troubles people face when deciding how to allocate their money. Knowing what these problems are will allow you to put them under a light, so to speak, and see exactly what they are and how they work. Once you realize what your problems are, you can start to seek specific and powerful solutions. Below, find some truly crippling financial problems people face daily and how you can go about solving them.

1. Living Paycheck to Paycheck
The statistics are staggering. According to Angela Johnson of CNN Money, “Roughly three-quarters, [or 76%,] of Americans are living paycheck-to-paycheck, with little to no emergency savings,” for things such as job losses or medical emergencies. These types of negative situations can be avoided with some basic financial management tools, such as budgeting and investing, which I will speak more on later.

2. Having Too Much Debt
Erika Rawes from USA Today states, “The average household’s credit card debt exceeds $7,000, according to Nerd Wallet.” With ever increasing, compounding interest rates, people can be crippled by credit card debt. For people with any credit card debt, it is important to live by this rule, “Do not spend money that you do not have.”

3. Having No Budget to Work Off Of
Budgeting can be overwhelming for people, as it takes a lot of time and thought to create a successful one. Oftentimes, people have no idea how to begin a budget or know what resources to use. Take a look at these budgeting softwares or these apps for you smartphone.

4. Poorly Investing and Overspending
People have a difficult time living according to a budget. When using a credit or debit card, it is easier to overspend than when you are using cold hard cash. This doesn’t mean that we can only use cash to make purchases; however, even when people create a budget to live by, they still have a difficult time following through. It is important to get the assistance of someone you can trust to help you make purchasing and investing choices moving forward if changing your habits is not your strong suit.

5. Focusing Too Heavily on the Present
Rawes further states that “According to a Federal Reserve survey release from earlier this year, ‘Thirty-one percent of non-retired respondents reported having no retirement savings or pension, including 19% of those ages 55 to 64,’” and 40% said not saving was their most monumental financial issue. About 25% of those same people from that Federal Reserve survey stated that they have not started thinking about saving for their retirement whatsoever.

Focusing on the present is imperative for getting things done, but it is vital to focus on the future in order to plan for proper action. Creating a budget that allows for you to not only spend but save will allow you to start saving for your retirement. I also recommend making some investments that can help earn you more money as the years go by so that you can have even more money than you earned originally set aside for your retirement. Find out more information here on that topic.

6. Families/Partners Don’t Discuss Income and Expenses
When only one person in a family/partnership knows where the money goes and comes from, it can be difficult to keep to a budget. When expectations are not set by facts, one can lack the knowledge necessary to make financially safe purchases and investments. Having a monthly or even bi-weekly meeting about all profits and losses within a family unit or partnership can keep everyone from making poor financial choices.

7. Emergencies Aren’t Planned For
If someone who earns any money for the home suddenly goes on disability or passes, this can very heavily impact the stability and financial safety of a home. It is important to go over life insurance and disability resources you have at the company you work for before emergencies happen.

8. Children Aren’t Trained to Understand Finances
A child’s ability to learn is like a sponge soaking up water. It is important to teach children early on how to manage money. There are piggy banks that split the jar into four categories of money management. These can help children to learn basic financial wisdom at a young age.

9. Poorly Used Benefits
Oftentimes, companies have an array of different benefits available for employees. These can include things such as commuter financial assistance, free books and lectures, and free tickets to certain entertainment venues. All one has to do in order to take advantage of and find these great benefits is to review what you believe you have in benefits with your Human Resource Director. Ask any and all questions that you have. That is what they are there for!

What financial issues do you face? What solutions have proven helpful for you? Tweet me @EricaHill_KW with your thoughts and questions!

Track Your Spending with These Apps

Personal finance is difficult to keep track of, especially for people who are constantly busy. When you’re always running around, the small things you spend money on tend to add up. Even though an individual expense may seem inconsequential at any given time, it is most beneficial to keep track of all such expenses so you can plan your budget accordingly each month. Thankfully, there are many personal finance phone applications to help you keep track of everything you put your money toward. Below are three that I have found to be most useful.

Dollarbird

This app integrates all of the expenses you record into a calendar so you know exactly when you spent what. Not only does it keep track of when you spend your money, but it also calculates directly the impact on your checking balance. However, it does not link to your bank accounts, so it is best to check bank accounts regularly as well for any discrepancies.

Goodbudget

This is an app whose sole purpose is to help you budget. Remember the times when people kept envelopes of all their spending in specific categories? This is just that, except in digital form. You can create categories and set a budget for each. Whenever you make a purchase, just mark it in its designated category, and be sure to stop spending money when said category runs out.

Penny

Penny has labeled itself as a personal finance coach for good reason. It is an app that links to your bank accounts and sends you personalized text messages based on your balance often. Not only will it inform you how much is in your balance, it will also provide you with charts and graphics that can help you see your spending habits visually.

For more information on apps that help you track your daily spending, check out this Forbes article.