Many problems managed by people with debt today are caused by financial illiterate. Basically, people don’t know some of the most important aspects of managing their money and remain in their means. This problem develops among younger generations, most must work hard to understand and share with others. Consider these four important financial questions.

How many mortgage payments you have to go to your rent or mortgage? 50? 25? Experts agree that your rent or mortgage payment should not exceed 31% of your monthly income. Whatever more than this amount can make tension on your ability to make other payment obligations such as utility, gas, food, etc. Keep your rent or mortgage as low as possible can even free money to go towards credit obligations such as a credit card or medical bill payment.

How can you increase your fastest credit? Many people consider it to consolidate their debt into one payment. Others have a paid account, but since it closes the account. In fact, none of them tend to benefit your credit in the near future. In fact, close the old account can actually damage your credit by reducing the amount of credit available. The best way to increase your credit score is to pay an existing account to less than a 25% limit on the account. Has some healthy debt for your credit score, but the balance is more than 25% very damaging.

How big is your emergency fund? You may have heard financial gurtains such as Dave Ramsay encourage emergency funds to six months or more of the cost of living. This is the best way to protect yourself if there is unexpected financial difficulties. What if you are dismissed? Or suffer an injury that prevents you from working? Having these funds in a place can help maintain your financial needs when you return to your feet. If you can’t do six months, shoot at least three. Every emergency fund is better than no emergency funds and can save your financial life at the end of the road.

How many insurance do you need? Whether you are single, married or have children, it’s important for us to have life insurance. Cemeteries can be thousands, not to mention how hard it can be given as a single parent. The minimum number of life insurance you need is enough to cover the funeral, an average of around $ 8,000. If you get married or have children to take enough life insurance to change your income for at least two years. This will help your partner and children survive while the family stands back. If you can afford it, have enough insurance to replace your income until children are in high school.