How to Put Your Financial House in Order

How to Put Your Financial House in Order
  • Opening Intro -

    Personal financial problems can take its toll, costing you peace, security and even more money if your problems are not controlled.

    Regardless of how you got to where you're at today, you can begin to put your financial house in order immediately.

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What you spend

— The problem most people have when it comes to financial matters is not knowing how much they spend. Overspending is a significant part of the problem, with credit cards enabling consumers to spend beyond their means. Track your spending habits for a month, jotting down what you spend on a notepad no matter how small the amount.

Justify your spending

— You’re now aware that you spend too much, so now is the time to justify your expenditures and cut out the rest. This may mean eliminating your daily stop at the coffee shop for that $4 latte, choosing home brewed coffee instead that will cost you a fraction of that amount. It could also mean selling something you can’t afford, like that extra car you’ve been meaning to restore.

Eliminate debt

— Are you spending large sums of money every month making payments on credit cards? You can reduce your debt faster by consolidating credit card debt to one low monthly payment. Attack your debt and you’ll have more discretionary income to spend once you master this problem.

Change your shopping habits

— No, this isn’t an appeal to you to begin clipping coupons although coupons can reduce your food bill. Rather, where do you shop? Grocery store prices are fairly uniform across metropolitan areas, thus savings can only come by carefully following advertising circulars and clipping coupons. You can bring additional cuts to your grocery budget by shopping at a warehouse club. Membership fees, averaging near $50 can be recouped in just two or three visits. You should be able to save 10 to 30 percent on your groceries, keeping in check one of your more significant and regular expenses.

Manage your utilities

— One area of expense that can have an overwhelmingly negative impact on your ability to maintain your finances are your utilities. Water, sewer, electricity, gas hook up, cable, Internet and phone can cost you hundreds of dollars each month, even top $1,000 during winter months especially if you live in a colder climate. Consolidate your phone, cable and Internet connection to one account. Check your toilet and water lines for leaks and have these repaired. Set your thermostat at a lower setting and disconnect anything that doesn’t need to be powered. Use this same strategy to attack your insurance — consolidate your homeowner’s and car insurance, review your life and accident insurance policies, and get a handle on your medical and dental coverage. If you must, raise your deductibles to keep your premiums under control.

Weigh your purchases

— Before purchasing anything ask yourself a question: “Do I really need this?” Chances are if that item is something other than an essential item, your answer will be, “No, I don’t need it.” Get in the habit of understanding what your wants and needs are, making a distinction that is clear and easy to follow. This means being happy with your basic cell phone and putting of the purchase of an Apple 4S phone, which is something you clearly do not need. Once you get your financial house in order, then you’ll have room to occasionally splurge. But not until then.

Considerations

Get in the habit of reviewing your credit reports regularly, at least once annually. These reports can help you track your spending habits and may contain information about you that is wrong or outdated. By law, you are entitled to receive one free copy of each of your three credit reports. Visit AnnualCreditReport.com to get your free copies from Experian, Equifax and TransUnion — the three credit reporting companies.

Lastly, if you’re still having trouble keeping everything under control, a financial counselor may be needed. Contact your county resource department to find out if a community-supplied counselor is available to assist you.

Life-Event reference:

more lowering your bills tips

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Categories: Consumer Financing