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Blogging for Change Blogging For Change
by sitecore\kmcgrigg on June 10, 2009
Are you overwhelmed by the sheer volume of financial information available today? If so, you aren’t alone. In fact, research shows that Americans are so overwhelmed by their financial choices that many feel “paralyzed and confused.” Basically, we are afraid of making the wrong choice, so we too often make no choices at all. In the psychological world, this is known as Decidophobia: fear of making decisions. In addition to analysis paralysis, there is a lot of bad news out there to feed our fears. Every day we are bombarded with words like foreclosure, losses, inflation, unemployment, repossession, and bankruptcy. The good news is that making financial decisions doesn’t have to be a frightening experience (unless of course you have Chrometophobia: fear of money!) While I generally feel that educating yourself about current events can help you make informed decisions, I also believe that sometimes enough is enough. When it comes to money management, things don’t change all that much. Don’t believe me? Here are ten tips to money management that I published more than TEN YEARS AGO that still apply today (totally unedited!)

1. PLAN - Plan for the future, major purchases and occasional expenses like car insurance or taxes.

2. SET FINANCIAL GOALS - Determine short, mid and long range financial goals.

3. KNOW YOUR FINANCIAL SITUATION - Determine monthly living expenses, occasional expenses and monthly debt repayments. Compare outgo to monthly net income. Be aware of your total indebtedness.

4. DEVELOP A REALISTIC SPENDING PLAN - Follow your plan as closely as possible. Evaluate your plan by comparing actual expenses with planned expenses.

5. DON’T ALLOW EXPENSES TO EXCEED INCOME - Don’t charge more every month than you are repaying to our creditors. Avoid paying only the minimum on your charge cards.

6. SAVE - Save for expenses which occur infrequently, such as car and home maintenance. Save 5 to 10 percent of your net income. Accumulate 3 to 6 months salary in an emergency fund.

7. PAY YOUR BILLS ON TIME - Maintain a good credit rating. If you are unable to pay your bills as agreed, contact your creditors and explain your situation. Contact a nonprofit credit counseling agency for professional advice.

8. RECOGNIZE THE DIFFERENCE BETWEEN NECESSITIES AND THINGS YOU DESIRE - Take care of necessities like food and housing first. Money should be spent for wants only after basic necessities have been met.

9. USE CREDIT WISELY - Use credit for safety, convenience and planned purchases. Determine the total you can comfortably afford to purchase on credit. Don’t allow your credit payments to exceed 20% of your net income. Avoid borrowing from one creditor to pay another.

10. KEEP A RECORD OF DAILY EXPENDITURES - Be aware of where your money is going. Use a spending diary to assist you in identifying areas where adjustments need to be made.

Posted in:  Budgeting Advice, Economy

Comment(s)

Courtney V. says:
June 10, 2009

Great post! Ties in nicely with the "retirees and money" video you did.



cynthia bell says:
June 10, 2009

money management was the best thing i ever did. At first it was very difficult, however money management continued to work with me and any issues that arose. It took five years to pay off my debt. It really didn't seem that anything was changing, then i started seeing the difference in my accounts then one was gone, i cannot tell you how delighted i was that made it a challenge to stay on track. i have been out of money management for almost a year now and what a relief i can actually buy things with cash. all the credit cards are in the shredder along with alllll the ones that everyone wants me to get. NEVER again. i learned my lesson if you cant pay with cash. Save it then buy it.



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