Friday January 27, 2012
As the economy improves you may be tempted to loosen up on the financial rules you have set for yourself. You should be careful before you do that. It is important to follow the same basic financial rules no matter if the economy is booming or if it has tanked. As the economy improves you need to make sure you are following the most important rules to keep your money safe, and to stay on your financial plan.
First you need to stick to your budget. It is important that you always spend less than you make whether the economy is good or bad. Your budget will help you do that. YOu may be able to expand your spending as your salary increases, but you should make sure you are hitting your other financial goals as well.
Second you need to plan for the future. This means that you should be saving regularly. You should be putting around fifteen percent of your annual income towards retirement each month. Additionally you should establish an emergency fund and save additional money towards the bigger things you want to purchase.
Third you need to focus on getting out of debt and staying out of debt. Your debt limits what you can do with your money. You should be earning interest, not paying it each month. Set up a debt payment plan, stick to it, and then plan for your major purchases in the future by saving up for them.
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Thursday January 26, 2012
The challenge for this weekend is to set up a budget that helps you reach the financial goals you have set over the last month. Your budget is the key to succeeding financially. The budget will help you to make sure you are spending your money on the things you feel are most important. It will also help you prepare for your the future, and keep your general financial picture under control.
Although planning out your budget may seem like a lot of work, it is easy compared to following your budget. You need to give yourself time to adapt to the changes, and make sure that the limits you are giving yourself are realistic for your current situation. In a future challenge we will evaluate the budget and make changes, but this weekend you need to set it up so that you can begin to follow and track your spending over February. You may also want to find new budgeting software to use to help make tracking your spending easier.
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Wednesday January 25, 2012
No one plans on going to the emergency room, right? That's why it's there for emergencies, things that you do not expect to happen. The truth is that you will face many unexpected events in your life, and most of them will impact your finances in some way. some of the events may end up being very happy, if a little bit shocking, while some may be just plain difficult to get through. Recently I have had several relatives end up in the emergency room for a variety of reasons, but the influx of people I know needing to go get the extra help has made me extra aware of just how we can't prepare for the unexpected.
You can prepare for the unexpected by doing a few basic things. this will make it so that you can handle the situations without them pushing you over the edge finanically. It is easier to deal with a tough emotional event if you do not need to worry about finances in the middle of it. First you need to make sure you have good insurance coverage. You should have health insurance, renter's or home insurance, and life insurance. These are not luxuries and should not be cut from your budget. Next you need to set up an emergency fund of about six months of income. These basic steps will make it easier to deal with the unexpected in your life. What have you done to prepare for these events?
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Friday January 20, 2012
If you are looking for easy ways to manage your money while on the go, you may be looking for online money management tools, that allow you access your account information on the go. There are tools that will download your account information for you each week, send you spending reports, and check your balances, so you know where you are at any given time financially. It seems like there are more of these tools each year.
It is much easier to begin to make financial changes if you have the tools available to use. Some people may embrace a more traditional method of writing down the budget each month, while others love the convenience of these tools. The key to making them work is actually using them each month. It may be best to try several different options before settling on the tool or solution that is best for you.
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