When it comes to money, what are you afraid of?

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.

Kim McGrigg is the former Manager of Community and Media Relations for MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.