Our country's financial situation would greatly improve if personal finance courses were required in high school and college. The reality is that a lot of people make significant financial blunders without even realizing it. Spend some time reflecting on your own routines to avoid falling victim to the same traps.


All of the following points will be moot if you can't keep your spending under control. Good luck paying down debt, investing in assets, or saving for retirement when you spend more than you bring in. This can be a problem for any level of income. If you get a raise or come into new money, don't let lifestyle creep (when former luxuries become new necessities as the standard of living improves) eat away at your income. The average person is exposed to over 2000 advertisements a day, making it very tough to not give in to a few of them. Everywhere you look you are being told to spend money, and even the most disciplined shoppers can falter at times. Try to focus on what you have instead of what you don't. Create a budget and stick to it!

Plan for Risks

The only thing certain about unexpected events is that they will happen eventually. Having your risks covered is a crucial part of any financial planning. It only takes one unexpected surgery or layoff to screw up your finances. Even a leaky roof or broken transmission could put you off track. Have a three-month emergency fund plus enough to cover your highest insurance deductible if possible. Plan for the unexpected stops you from making other financial blunders later on.

Many people struggle with personal finances. They do not keep track of their expenses, they spend more than they should, and they do not have enough money for emergencies -- among other significant problems. While potential fixes are many, one method that will almost certainly help is simplifying your personal finances.

Keep a Budget

A budget is any means of tracking money you make and spent over a month. A budget is a cornerstone of effective, simple personal finance. Examining your budget will allow you to figure out where exactly your money goes. You can cut down where you need to, avoiding the phenomenon of n1 having as much left over at the end of the month as planned -- an issue that afflicts many people.

Consolidate Accounts

Many people have multiple bank accounts. Others, especially those who have switched jobs often, have several 401(k) accounts. More accounts can easily increase headaches for a person, as each must be managed separately. Having multiple 401(k) accounts with different companies can mean being subjected to additional fees too. It may be wise to roll over the various 401(k) accounts into a single IRA.

Save Periodically

Putting aside money for savings on a regular basis is a basic element of sensible personal finance. Making the process of saving automatic will simplify matters, eliminating another mundane chore that must be taken care of. It only takes a few minutes to set up an automated transfer from a checking to a savings account. This method also avoids the temptation to spend money rather than save it. If you haven't already, moving to an all-digital mode of tracking finances will make life easier.