3 Ways to Take Control of Your Finances

The economy is ever-changing and the almost constant rising inflation doesn’t make things any easier. If anyone wants to get ahead in the world, then he or she is going to need to learn how to take control of their finances. The more in control you are of the money that comes in and out of your bank account, the more control you have over the rest of your life. Below are some lesser-known ways that any adult can use to hold their cash a little closer to his or her chest.

Get High Cash Value Life Insurance 

At first glance, it might not seem to make much sense that having a high cash value life insurance would be of much benefit to the policy holder. However, that’s because not many people know that some life insurance policies can be borrowed against while the policy holder is still alive. Of course, whether or not a person can borrow against their life insurance policy will depend on which company he or she is getting the life insurance through. 

Borrowing against life insurance isn’t common, but it does happen. Some people call this tactic becoming your own banker. This is because, with this type of life insurance policy, you can effectively take out loans from yourself. Like other loans, there may be interest a borrower will need to pay back into the life insurance and make sure not to take out too much money from it so that something is still left behind for his or her inheritors. 

Open a Brokerage Account

When most people think of investing, they might think of stocks and Wall Street. However, that’s not the only way that adults can invest their hard-earned cash. One way to start investing, even if you don’t know much about it, is to open a brokerage account. A brokerage account is usually run by a brokerage firm. What each brokerage firm does for its clients will vary greatly from firm to firm, so it’s best that each person does his or her research to make sure that he or she finds a firm that does exactly what he or she wants them to do.

Once a person picks a brokerage firm, he or she will likely be connected with a broker. This person will be the one to buy and sell stocks. The broker will take part of the earnings from each successful trade as a commission fee. Depending on which firm a person chooses, he or she may also have some direct control over which stocks are invested in or not.

Pay Off Debts Before Saving

When it comes to saving more money, it all comes down to basic math. How much money are you taking in and how much are you spending? Which loans or bills have interest rates and which don’t? Generally speaking, it’s best to pay off debts that have higher interest rates. The higher the interest rate, the more money will build up. The more money a debt builds up, the longer it takes to pay off. It’s a dirty cycle– that lenders depend on. This holds true for both bank loans and credit card debt.

Opposite to debts, savings accounts build interest. This means you will earn more money over time. In this case, the higher the interest rate, the better. Sadly, savings interest rates are almost never higher than debt interest rates. That’s why it is so important to pay off debts first. If someone dumps all of their money into a savings account, they may earn some money from the interest. However, in the end, he or she might be losing money, as he or she will be having more interest built up on debts.

Just about everything involving money seems to be confusing these days. That’s why it is so important to take control of your finances. Try these tips to have more money in your wallet.