Top Tips to Protect Your Personal Finances (4 Video Links)

Quite often people find that it takes a lot of time, and hard work to earn their money, but it is easy to spend or lose it. There are many ways in which a person can lose their hard-earned money, especially if they are not careful, or don’t have a good understanding of how they can keep it safe. While there are many ways in which you can protect your personal finances, here are a few top tips to get you started.

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Don’t put all your finances in one place

It is quite common to find people placing all of their finances in one place, such as a bank account, or in a personal safe within their property. Although there are benefits to storing all of your finances in one place, it does leave you vulnerable to a singular unfortunate event that may completely obliterate your finances.

For example, if you have all of your money in a singular bank, and for whatever reason they collapse, you will have lost everything. Similarly, if you have all of your money, or valuables stashed in a personal safe at home and you either get robbed, or your house catches fire, you will have once again lost everything. Instead, think about how you can cleverly distribute your wealth around so that you have it located in different things or places. That way if one pot of money is affected, at least the rest will be safe.

Assess your lifestyle

Sometimes the thing that is putting your money at the most risk is yourself. For example, you may have some unhealthy lifestyle choices that continually risk your personal financial situation. Whether it is gambling habits, health-related, spending too much too regularly, or putting yourself in a position where you may get sued by others due to your reckless behavior, you should consider if there are any lifestyle choices that you could change.

Create a budget and track your spending

If you are looking to protect your financial situation, then one of the best forms of protection is to create a budget and track your spending. People will assume that spending a lot of money on high-ticket items such as a new car, a holiday, or a phone are the things that destroy personal financial situations. However, the things that are much more likely to have a negative effect on them, are the things that you purchase regularly. This includes things like clothes shopping, grocery shopping, eating out, socializing, or impulsively buying stuff online. Subscriptions are another expense to keep an eye on as they are only a little bit of money here, and a little bit of money there. As time passes all of these little expenses will add up and cause significant damage to your personal financial situation if you are not careful. To help avoid this from happening, simply create a budget for yourself, and actively track your spending. This will help you to see where all your money is going, how you can spend more wisely, and on what areas you need to work on.

Cover yourself with important policies

Depending on your lifestyle, and current circumstances there are a variety of important policies that you may have in place already. If you do not, then these are a few that you should consider researching. By putting these policies in place, you will not only give yourself peace of mind, but you will also be actively protecting your personal finances should something out of your control happen.

Vehicle and home insurance

When you are not at work, then a large percentage of your time will likely be in your home, or traveling between different places in your vehicle. Both of these purchases can cost a lot of money, and if something unexpectedly happened to either of them you could find yourself in quite a bit of trouble if you did not get covered with any insurance.

Personal liability insurance

If you work for yourself then you are likely trained, skilled, and knowledgeable in your industry. However, this does not mean that you won’t make a mistake, or that something might go wrong. To help cover yourself in the unfortunate event that something does go wrong or is your fault, you should look into personal liability insurance.

Life insurance

No one wants to think about what might happen if one day you are unexpectedly taken. However, if you are serious about protecting your personal finances, and your family’s future then you want to ensure you have considered looking into it and make sure that you understand how life insurance works. For example, it is often a lot cheaper for you to get covered, the younger you are.

Invest smartly

Investments are one of the best ways to protect your finances, but only if you do it smartly. A lot of people have been recently interested in cryptocurrency, and non-fungible tokens (NFTs), however, where this style of investment is still currently quite new, the market is still fairly volatile. Although a lot of people have made their fortunes investing in various cryptocurrencies and NFTs, a lot of people have also lost a lot too. When you invest your money you want to make sure that the history of the product you are investing in has a long-standing reliability, as well as doing your own in-depth research into how the market is moving. A few examples of what people generally look at investing their money into are jewelry, precious metals, long-standing companies, antiques, artwork, and classic vehicles.

Pay your bills and avoid debt

This might sound like an obvious thing to do, but it is surprising how many people knowingly put themselves in a position where they accumulate debt from unpaid bills. If you miss a bill payment, not only will you end up on the slippery slope of missing future payments, but it can also negatively impact your credit rating, making it harder to put yourself in a financially stable situation in the future. To avoid this, and help protect your financial situation you should work out your monthly outgoings, and set up a regular payment system to ensure you stay on top of everything.

Be selective on who you lend money to

In life, you will come across times when others need your help financially. It could be a friend, a family member, or a colleague at work. Regardless of what your relationship is to the person that is in need of your help, you should always consider whether or not this will put you, and your finances at risk. For example, if it is only a small amount that you are lending, or giving to someone so that they can get lunch because they left their wallet at home then the risk is very low. But if someone is asking for a loan to help pay for a new car, or start a business venture, then you need to seriously consider how much you trust this person, how much you believe in them, and how much you trust them to stick to their word and pay you back in the timeframe that you have asked for. A lot of problems arise, and relationships break down over money disagreements. Not only that but if something were to go wrong, you are the one who will have been put into a poor financial situation.

Consult with a financial advisor and an insurance agent on these important personal finance issues.

So, if you are looking for ways in which you can help protect your financial situation and build positive habits, why not consider implementing, and considering some of these top tips?

Good luck.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

 (amazon author page) amazon.com/author/kenboyd 

 (email) ken@stltest.net

 (website and blog) https://www.accountingaccidentally.com/