Like most acquired skills smart money management takes practice. While some of us may be pros at managing our money, we call could use a little boost from time to time. Here are some important facts about money management we all should live by:
Balance your housing budget
The ideal budget for housing is less than 30% of your monthly income. Anything over this amount is likely to leave you with a budget too tight to cover the costs of other living essentials and financial obligations. The lower you can get your housing budget, the more money you will have towards an emergency fund.
Save for six months of expenses
Financial gurus like Dave Ramsay recommend having at least six months worth of housing and living expenses saved up as an emergency fund. If you were to lose your job, this money could help support your family while you look for new employment without the worry of being evicted or foreclosed upon.
Keep credit balances low
Most people don’t know that there is a fine line between good credit debt and bad credit debt. Balances over 35% of the available limit on the account can actually damage your credit score. If you want your credit card to work for you and your score, keep your balances below this threshold.