From GreenPath Debt Solutions
GreenPath has pooled the collective expertise of our counselors to bring you “The Best List” of money management advice to help you accomplish your financial goals in 2011.
- Hold a financial conference with the family. Present a “state of the household” speech where you review your current budget and make any necessary adjustments. Hold people accountable for specific changes that are required to balance the budget or establish a savings goal.
- Post your budget goals for the year. When establishing goals, it is important to make them SMART: Specific, Measurable, Attainable, Realistic and Timely. Include goals that will motivate you to achieve them – vacation, retirement, house, car, etc. Treat yourself to something small every month you reach your goal.
- Pay yourself first! Set aside at least ten percent of your net income for savings. The easiest way to do this is to have it directly deposited from your paycheck into an emergency savings account. Make it your goal to save at least three (3) months worth of living expenses. You should have enough to cover all (housing, auto, groceries, clothes, etc.) of your monthly expenses in the event of a sudden job loss or illness.
- Start paying off credit cards. Once you have established a balanced budget with a savings plan for emergencies, work on those credit cards. If you are already on a debt management plan with GreenPath, you are well on your way! If not, here are some helpful tips:
a. If you have trouble with interest charges each month, call your creditors and request interest decreases. If they deny you, ask them what you need to do before you can get one. Document who you speak with along with the date and time.
b. Pay it down! Review a list of all of your creditors to determine balances and interest rates. Determine a plan of attack. Some people start with smaller balances and eliminate cards; others send the most to the highest interest cards.
c. Set the payments you determine for each card into a bill pay service through your bank. Some banks eliminate monthly banking fees if you choose direct deposit and/or use their Internet banking features.
d. If you have trouble controlling spending, take all of the cards and lock them in a safe place. Out of sight means out of mind.
- Determine a baseline in your checking account. This should be your zero point (e.g. account never goes below $200). You’ve just created your own overdraft account!
- Many banks and/or credit cards offer cash back or miles programs. Using these cards within your budget, and paying them off immediately, can get you a good chunk of change by the end of the year. Consider using them to help you achieve a vacation goal.
- Use your credit cards wisely. Don’t spend more than you can afford to pay on a monthly basis. Responsible use of your credit cards will help you establish a solid credit rating and avoid financial problems. However, using your credit cards regularly for items such as food, gasoline, and utilities —- without paying off the balance in full each month —- could be a sign that your monthly budget needs reviewing.
- Visit or re-visit your retirement goals. Start saving now for retirement. If your employer offers sponsored programs that can match or have established savings vehicles, use them. Ask yourself how much it will take to retire and calculate this based on current savings and years left as a viable employee.
- Find a way to track your expenses. Save receipts throughout your day (ask for these whenever you spend). Make this activity a part of something else you do daily already. For example, before or after writing in a journal or putting your kids to bed, review where your money went that day.
- Review your credit report. Your credit worthiness will affect your ability to purchase goods and services on credit, to get a loan or to land that next job. If you have a good credit record, you are likely to receive lower interest rates which save you money. You can obtain a free copy of your credit report at www.annualcreditreport.com.
