7 Steps To Improving Your Financial Situation
Posted on October 26, 2007 in the Investing, Money category
.We have identified seven steps that you can do in order to improve your financial future. These steps can be done at any time of the year and we will write more about each step over the coming week.
1. Set Goals:
Write down what you want to accomplish in the next 12 months, how you will do it and when you want to accomplish these goals. If you actually write them down you will be much more likely to stick to them. Then review them every quarter to see if you are on track.
2. Track your Expenses:
Wondering where all your money is going? Never seem to have enough left over for savings? Then start a budget and see where all your money is going. With software packages like Quicken and Microsoft Money it is easier than ever. One tip though. Don’t keep track of every cent you spend. You will drive yourself crazy!!. The idea here is to get an idea of where you are spending your money so you can start to save money. Then once a month sit down and review it. You will be amazed how much those $6 lunches at work add up to.
3. Check your Credit Report:
It is a good idea once a year to check your credit report from the big three credit reporting agencies that are listed below.
- Equifax: Write to Equifax Information Service Center, Box 740241, Atlanta, GA 30374 or visit them here on the web.
- Trans Union: Trans Union, Box 390, Springfield, PA 19064 or visit them here on the web.
- Experian: Experian, Box 8030, Layton, UT 84041 or visit them here on the web.
4. Make a Will:
Protect your family from probate and take the next step in your financial planning journey, see an estate lawyer and get a will drawn up. Also, look at protecting your biggest asset Yourself, with term and disability insurance.
5. Start an Emergency Fund:
Most Americans only have one month of emergency savings. Although the job market is great right now, having a 3-6 month cushion is much sounder financial planning. For a family earning $60,000 a year, this means having liquid assets of between $8-15,000. By liquid assets I mean money that you can get to in an emergency. This includes savings accounts, checking accounts, money markets as well as stocks and bonds. Next month we will talk about what to do in case of an emergency.
6. Pay yourself first:
Yes this is very familiar advice but it is true. The easiest way is through a forced savings plan like your 401K plan at work. It is amazing how quickly a little from each paycheck can add up to be a significant amount of money. Also see how an IRA can help you reach your goals
7. Pay off your Consumer Debt
This again is familiar advice, but two easy first steps is to get a lower interest credit card and transfer the balance and secondly to make more then the minimum payment every month.
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