Get The Most Out Of 2010 By Improving Your Financial Situation
STOP SPENDING MONEY
Most people don’t realize that your finances are just as unique as you are. The reason for this; your financial situation is tied directly to your lifestyle. Therefore, if you want to change your financial situation; you have to change your lifestyle. But don’t worry it’s not like trying to quit smoking “cold turkey”. You can start by doing small things like; instead of going out to dinner and a movie twice a week, go once a week. You’ll find that you enjoy the experience more and look forward to it a lot more than you used to.
When looking to cut back on expenses whatever you do, DO NOT cut back on your medical insurance. This is where most people run into problems because if you are hospitalized the bills will be expensive. So rather go without food and drink water than cut back on your medical insurance.
For more tips in further detail, click the following link -
http://www.latimes.com/business/la-fi-cover3-2010jan03,0,4664393.story
Action Plan For Getting Out Of Trouble
If you are struggling financially here is an action plan that will help you get your finances back on track.
PAY OFF YOUR CREDIT CARD DEBTS
If you have credit card debts or any short term loans these need to be paid off immediately. This does not include your house, car or student loans (which still need to be paid off but are long term loans). So arrange your debts in order from smallest to greatest and start paying them off. You’ll find you really feel great when you start crossing off the easy ones to pay off first and it will keep you motivated to keep on going. If you are putting money away every month as part of a savings plan then you should rather use that money to pay off your debts first. When those credit cards are all paid off, cut them up! That’s not to say close the accounts as this will affect your credit rating but those credit cards have to go! A survey was done in the States where different families were given cash for three months to buy their monthly groceries and then given a credit card for the next three months for the same groceries. When using the credit card the families ended up spending 30% more than what they did with cash.
EMERGENCY FUND
Once your debts are paid off, start your savings plan and put away whatever you can every month until you have 6 months of living expenses saved. This is your emergency fund and will enable you to go 6 months without feeling the pinch if you happen to lose your job. This must include your rent / mortgage, lights, water, insurance, groceries, entertainment and whatever else you usually spend each month. Make sure that the emergency fund is invested in a low risk, capital guaranteed account; this is for emergencies only and is not money to invest in the Stock Market.
OTHER INVESTMENTS
When you have reached the goal for your emergency fund you can then start looking at investing whatever you save beyond that in high risk high return investment opportunities.
For more tips on becoming financially secure, click the following link -
http://www.oprah.com/article/omagazine/200910-omag-suze-small-steps
