How To Bring Women In Politics?

the same amount each month, this part is pretty easy. Take a good look at your paycheck to identify your gross and net income, and note any other deductions, such as employersponsored health insurance or a retirement plan.

If you’re one of the 32% of Americans whose income varies from month to month, calculating your income can be a little more difficult, but it’s still important. Learn how to calculate gross and net income based on your historical earnings here. Once you’ve determined your monthly net income, you’re ready to spend (responsibly!) with a personal budget.

2. Spend: Creating a personal budget

A personal budget is just a plan for how you want to spend your money, but it’s also the most useful tool for achieving your financial goals. To create a monthly personal budget, you’ll need to track your spending over the course of one month, and then break everything down into categories. These can be broad, as in the popular 50 30 20 budgeting rule, or specific, for those of us who want to get into the nitty gritty of our spending habits.

3. Save: Determining your financial goals

Everyone knows it’s important to save money, but it’s hard to spend less than you earn without specific financial goals to work towards. Your financial goals will depend on your unique situation, but should include:

• Saving for an emergency fund. Setting aside some money in a designated emergency fund will give you peace of mind, and also prevent a financial setback from overtaking your life. Financial experts recommend having at least three months’ worth of basic living expenses in an emergency fund.

• Planning for retirement. The experts agree: The earlier you start saving for retirement, the better. Most financial planners suggest setting aside at least 10% of your takehome pay each month for retirement savings • Saving for a big purchase. Whether you’re hoping to buy a car, a home, or pay for graduate school, the sooner you start saving, the less you’ll have to put aside each month.

• Paying off personal debts. Most people have some kind of debt, whether that’s student loans, credit card debt, or both. Check the interest rates on your loans: Paying off loans on time (or ahead of schedule) can save you thousands of dollars in interest.

4. Borrow: Credit cards, loans, and your credit score

Even if you’re a diligent saver, at some point you may have to borrow money to cover a large expense like a home or car. Maybe you borrowed money as a college student and are currently dealing with student loans or credit card debt. Borrowing isn’t necessarily a bad thing—as long as you know how to compare loans and maintain a healthy credit score APR (Annual Percentage Rate) is the key to comparing loans and credit cards. APR takes into account both the interest rate and fees to give you a more accurate idea of how much interest you’ll pay each year. A low APR means you’ll pay less interest over time, but how do you get one?

In general, the higher your credit score, the less interest you’ll be charged. That means that if you’ve had financial difficulties in the past, you can get stuck in a vicious cycle where all of your money goes to paying off interest. That’s why building healthy credit is one of the most important steps to becoming financially literate.

Keeping a balance on your credit card is one of the easiest ways to rack up debt, but choosing the right credit card and using it responsibly can actually help you improve your credit score. Learn more about how credit cards work in our complete guide.