Basic Personal Finance and Credit Cards Management Tips

How you manage your personal finances and credit cards directly reflects how you manage your small business’ finances. You cannot isolate the former from how you actually manage your small business. I have noticed that those who failed miserably in their start-up business were actually those who mismanaged their personal finances and buried themselves in debts. You can avoid that. Here are three practical tips on basic personal finance and credit cards management (unfortunately, we tend to neglect) you might want to consider:

(1) Credit cards are your business allies. They can bridge the gap between paying your suppliers and your next collection. Caution though, you should always get only no annual fee credit cards. Do not add burden on yourself with annual membership fees that arbitrarily increase yearly even when you have not utilized your cards. If you can find credit cards that can offer, interest-free credits but with annual fees, try to weigh your options.

(2) Choose balance transfer credit cards. This is by far the easiest way to manage your spending and protect your good credit ratings. Through this sensible process, you actually save money from APR interest rates. Not only that, here, you will only worry about a single creditor. Why carry multiple cards when you can have one that can suit your needs? Having one creditor breathing behind your neck is more comfortable and you can ably have control over your personal finances. Remember; make your credit card works for you like an ally.

(3) Carefully use your credit cards for your NEEDS, not WANTS. This is personal finance common sense. But how many of us have really taken this seriously? Well, if you are one of the heirs of Hilton probably you need not worry about this. We have seen many rich and famous people who were dethroned from their financial thrones (pun intended) and are now wallowing in debts. Lesson: they failed to manage their wants. I will always revert you to Tips No.1 because that is where it should start. Make your credit card your ally by utilizing your credits on your NEEDS only. In short, prioritize your spending.

Very basic indeed, yet we tend to ignore. Let me hammer this with Dave Ramsey’s sensible admonition:

Financial peace isn't the acquisition of stuff. It's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this.