Five Keys to Dealing in Finance

If that sums your finances up then you are dealing with money. To deal in finance is to understand how to get your money to work for you, and to know exactly where your money goes.

The good news is that if you to learn how to deal in finance it is not too late for you all you have to do is change your thinking. It sounds easier than it is but if you are sick of being in debt and would like to have money saved up then these tips are for you.

1. Separate Emotions from Money
   

   This is one of the most important keys in wealth thinking because most of the average person's purchases are done on an emotional level. Have you ever been upset and went shopping then you begin to feel better or have you ever lost sleep because you feel like you will never get out of debt? These are two different examples of money and your emotions. Once you can separate the two you will start to live a less stressful life as well as have some extra money around.

2. Change The Way You Spend Money
   

   Money is a tool for you use. Like any tool it should only be used for certain jobs. There are three tools in spending money; there are checks, debit cards, and cash. Notice I did not mention credit cards, they are not a tool of money or finance they are more like a disease that will kill you financially. Now let's look at how these tools should be used. Check should only be used if you pay bills through the mail because when you use a check or even a debit card you do not feel it impact of the amount your spending as if you were to pay cash. Example you go to the store and spend 250 dollars. When you use a debit card or check you only think of the 250 dollars as a number not as an amount. Now when you pay in cash the cashier asks for 250 it has more of an impact on you since you have to count it out for them. You should always pay in cash and then remember to save your change. Last but not least you should only use your debt card for ATM withdrawals or online bill pay.

3. Learn How to Save Money While Paying Debt
   

   This key sounds impossible but it is quit simple. Lets say you have 50 dollars a month left over after you pay all of your bills including gas, food and more. If you were to save 25 dollars a month and put the other 25 dollars on one of your credit cards in one year you would have paid an extra 300 dollars on your bill plus saved 300 dollars. Now that does not sound like a lot but the key in this step is that when you pay off your first dept to take that payment amount and do the same thing with it as the 50 dollars. Let's say your credit card minimum payment was 35 dollars a month. Once it was paid off you would now have 85 dollars a month to save a payoff debt. That would equal 42.50 a month or 510 dollars a year being saved and put on your next debt. Most experts say that if you do this until all of your debts are paid off and you apply the money towards your mortgage you could be completely out of debt in 9 to 12 years. If that does not excite you I don't know what will.

4. Know Where Your Money Goes
   

   There are plenty of get out of debt systems out there today that want to help you, but most of them charge anywhere from 50 dollars to 200 dollars. If you're like me you don't have an extra 200 dollars to throw away. The funny thing is that they all teach the same thing; they tell you to make a finance diary and write down everything you spend. You should be doing this anyway if you are balancing your check book. Not every one is balancing there check book because if they were these companies would not be making a fortune off of us. This is the simplest step all you have to do is remember to write down every little thing you buy everyday. Once you do this you will find things that you are buying that you do not need. That is a wonderful step because if you can see you are wasting money you can change your habits.

5. Have Your Money Work For You
   

   Wouldn't it be nice to get a check in the mail for 20 dollars for doing nothing? Well this is how compound interest works. Once you save money you should but it in a place where you can earn interest and have your money work for you. In your local banks you have savings accounts and certificate of deposits or a CD and something new called an EZ- certificate of deposit. The rate on these entire products is different and depending on how much money you have saved up and the interest rate will determine which one you choose. In most cases the savings account will have an interest rate of 1 to 2 percent. That means for every hundred dollars you have you will earn 1 to 2 dollars. The certificate of deposit is a count that has a minimum amount required to open and has a time to which the CD will mature meaning you can not take your money out with out a penalty. The good news is that the CD has a higher interest rate so the wait is worth the money. The EZ-Certificate of Deposit is the same as a regular CD but you can withdraw you money anytime you want without a penalty.
   

You can also look online and find a bank that has a savings account with a higher interest rate than your local banks. ING Direct and HSBC are two of the biggest online banks and pay anywhere from 3 -4.5 percent for just savings accounts they also offer CD. No matter where you put your money as long as it is earning interest you are truly getting money for nothing.

I hope the five keys to dealing in finance will help and change people's lives I will leave you with a quote from an unknown source "The art is not in making money, but in keeping it."