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It is very important that you pay attention to your financial situation. Just because you are able to afford your monthly expenses, that does not mean you are far from a disaster. If you are oblivious to what goes on in your personal finances, you need to snap out of whatever is occupying your mind and start to pay attention to it. You may be unaware that you are already spiraling towards a financial catastrophe. Believe it or not, some people look financially secure on the outside, but in reality, they are one emergency away from being broke. These are the people who can afford to pay their monthly dues but if something happens that will compromise their income or bloat their expenses, they might end up in a very tight financial situation. If you are happy about your current financial position, make sure that you understand why. It is not enough that you have money in your wallet and that all the bills are paid. Ask yourself - if something happens that will require a big amount of money - will you still be happy about the current state of your finances?
Survey says that 50% feel better about their financial positionAccording to a recent survey done by Gallup.com, 50% of Americans feel happy about their financial situation. This is an improvement compared to 2013 wherein only 43% feel better about their personal finances while 55% said that they were not happy. Two years later in 2015, only 48% of Americans do not feel happy about their current financial position. If you think about it, the difference may not be that much but the bottom line is, there is an improvement somewhere. The survey done by Gallup was intended to measure the financial state of the American consumer. While the question about whether or not they are happy with their finances is important, you have to admit that it does not give us much clue about the real situation. Of course, Gallup asked other questions that are worth looking into because it will give us a better picture of the financial state of the average consumer.
- 71% of the respondents claim that their finances are enough to allow them to buy what they need.
- 31% of the respondents say that their financial position provides them with more than enough to finance what they want to spend on.
- 61% of the respondents claim to display proper spending habitsby cutting back on what they spend every week. This is actually lower than the 65% of respondents who claimed the same back in 2013.
- 87% of the respondents claim that the watch what they spend closely. This is something that even those with high income/net worth claim to do.
- 65% of the respondents said that their families are doing okay or are financially comfortable but 36% of workers said that they are willing to work longer hours if it means they will earn more.
- 29% of the respondents said that they expect their income to increase after a year.
- 50% of the respondents renting a house said that they are unable to buy a house because they do not have a down payment. 31% said that their reason is that they cannot qualify for a mortgage.
- 43% of the homeowner respondents said that they believe the value of their house increased compared to 2013 and 70% of them said that the value of their house is bigger than their mortgage.
- 47% of the respondents said that they cannot cover a financial emergency that is worth $400. In fact, 31% of respondents said they went without a medical treatment because they could not afford it.
- 63% of the respondents said that they saved some money in the 12 months prior to the survey.
- 60% of the respondents indicated their confidence that they will be approved of a mortgage. 76% of the respondents said that they own at least one credit card and more than half of them pay their balance in full at the end of the month.
- 39% of the respondents said that they have not considered any form of financial planning for their retirement while 31% said that they do not have any form of retirement savings. 45% of the respondents said that they expect to work while in retirement.
How to handle your personal finances wiselyRegardless if you currently have a good financial situation or not, you need to realize that proper financial management is very important. If your financial position is stable because you are a great manager of your money, then good for you. But if not, then you need to start learning how to handle your finances wisely. Otherwise, you might end up losing your stable financial condition because you made the wrong choices about your money. It is best that avoid being placed in a position wherein you have to improve your finances. Nobody will do it for you. It is important that you know what to do about it. Although it may be a daunting task, you need to do it. Here are a couple of tips that you can use.
- Understand your financial situation. This is the first step if you want to handle your finances wisely. You need to understand what you are up against. Here is a video that tells the story of someone who suddenly had to handle her finances after a divorce. As you will see, knowing her current financial position was vital in getting their started on managing her money well.
- Know the important financial tasks. Once you understand where you finances currently stand, you will know if it needs improvement or not. You should identify the tasks that you need to accomplish so this improvement can happen.
- Identify your financial priorities. When you have listed the tasks that you need to do, the next step is to identify the priorities. There are times when your resources cannot support all the activities that you need to do in order to improve your financial situation. What you can do is to seek out the priorities and concentrate on that first.
- Name your financial goals. One of the ways to become a smart money manageris to set goals. To help you identify the priorities that you need to work on first, it is ideal that you have financial goals. Whatever will get you nearest to your financial goals deserve your attention first.
- Create a financial plan. Once you know what needs to be accomplished first, you need to create a financial plan that will help you get the gears going. This plan will help you take the next steps to improve your financial situation. Not only that, it will also help you monitor your progress as you go along.
- Commit to improve your financial position. When all of these are done, the last step is to commit to what you have set out to do. Although all of the steps have been done, your commitment will determine if all of your efforts will bear fruit or will be for nothing.