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The basics of personal finance

Jake Winkler - Edmond Life & Leisure

Apr 19, 2023

Jake Winkler answers common personal finance questions.

Q: What are some basic personal finance tips to keep in mind?
A: Some basic personal finance tips include creating a budget, setting financial goals, paying off high-interest debt, saving for emergencies and investing for the future.

Q: How can I create a budget?
A: To create a budget, you should first track your income and expenses for a month. Then, categorize your expenses and identify areas where you can cut back. Set realistic goals for your spending and savings and track your progress regularly.

Q: Why is it important to set financial goals?
A: Setting financial goals helps you stay focused on your priorities and make informed decisions about your money. It also gives you a sense of direction and purpose, and helps you stay motivated to achieve your objectives.

Q: How can I pay off high-interest debt?
A: To pay off high-interest debt, you should first stop using credit cards and other forms of borrowing. Then, prioritize your debts by interest rate and pay off the highest-interest debt first while making minimum payments on the rest. Consider consolidating your debts or negotiating with creditors to reduce interest rates.

Q: How much should I save for emergencies?
A: Financial experts recommend saving at least three to six months' worth of living expenses in an emergency fund. This can help you cover unexpected expenses, such as a job loss, medical bills or car repairs without going into debt.

Q: What are some good ways to invest for the future?
A: Some good ways to invest for the future include contributing to a retirement account, such as a 401(k) or IRA, investing in low-cost index funds or exchange-traded funds (ETFs) and diversifying your portfolio to minimize risk. Consider working with a financial advisor to help you make informed investment decisions.

Q: What are some common mistakes people make with their finances?
A: Common mistakes include overspending, not saving enough, investing too aggressively or too conservatively, failing to plan for the future and not seeking professional financial advice when needed.

Jake Winkler, CPA, is a partner at Arledge, the largest locally owned accounting firm in the Oklahoma City metropolitan area. Arledge is a recognized leader in the accounting industry offering practical solutions in the areas of tax planning, auditing, consulting, accounting advisory services and client accounting.

This article contains general information only and does not constitute tax advice or any other professional services. Before making any decisions or taking any action that might affect your income taxes, you should consult a professional tax advisor. This article is not intended for and cannot be used to avoid future penalties that may be imposed by the Internal Revenue Service.

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