GRAND RAPIDS, Mich (WOTV) -Mastering basic personal finance skills is one of the most important things you can do to improve your happiness and quality of life. The earlier you start developing and using personal finance skills, the more time you have to reap the benefits.
Setting and following a budget is probably the most basic personal finance skill you can have. Yet only about one-third of people actually have a detailed budget. A detailed budget is necessary to get a handle on where your money is going and to start deciding where you want your money to go — instead of just watching it go away!
Separating Needs vs. Wants
Separating needs from wants is a key personal finance skill. There is almost no limit to bigger, better, and newer stuff that you could decide to buy. The best way to make spending decisions is to become disciplined at distinguishing needs from wants.
Driving Down Interest Rates
A lot of people carry debt. But while you are paying off debt, it is worth putting in some effort to keep your interest rates as low as possible. Make sure you check with your local credit union to get the best rates possible. Shopping around can almost always result in a better deal. This skill can save you thousands of dollars per year on interest.
People who are financially successful know a key is to reduce spending and save money. This investment or saving mentality is what allows the small amount of money you avoid spending to grow into real wealth that can change your lifestyle and allow you the freedom to pursue your interests. Regular saving over time adds up — even with small investment amounts.