Your finances determine many important things in your life such as where you live, how you live, and what you’re able to do. So, it is very important that you get control of your finances. Here are some steps you can take today to start taking back control of your money and get on the path to creating wealth.
Start tracking your spending. The first step you need to take when taking control of your money is find out how you’re managing your finances right now. Where does your money come from and where does it go? You may be surprised to learn that how you think it’s being spent is often different than how it is actually spent.
To find out where your money is going, begin tracking it right now. Your tracking system can be as simple as a notebook page with columns, or you may want to set up a software program to help. Then write down all the money you spend as soon as you spend it. Don’t let guilt keep you from making entries. This step is meant to help you find out the truth about where your money goes, not judge your spending.
Set up a budget. If you don’t think you can follow a budget, think of it as a spending plan instead. To get your finances on track and start saving, you will need to spend less than you make. Write down where your money is coming from and on what dates you are paid. Then figure out how much of that money is spent on bills and other necessities. Write down how you will spend the remainder.
This is where you may realize you need to cut out some expenses so you can stay within your budget. Remember to plan ahead and put money aside for large purchases. Your needs will likely change every few months, so review your budget or spending plan regularly.
Start saving. The wealthy save a portion of their income so they can invest it and watch it grow. However, most of us aren’t accustomed to saving. We spend our money as quickly as we get it. To begin saving money today, contact your bank about arranging a regular automatic transfer from your account. Saving 10% of each paycheck is a good goal to strive for. While you’re getting used to the idea of saving, you may want to start out by saving 5% of each paycheck and build your way up.
Put away your credit cards. If you have your credit cards with you when you go shopping, you will probably use them. Eliminate your credit cards as an option by putting them away or even hiding them. If you remove them as a temptation, you will force yourself to live within your means by spending only the money in your bank account.
Ask your credit card companies for lower fees. Pick up the telephone and ask your credit card companies if they can work out a lower rate for your credit cards. Usually they will try to help you because it hurts both you and the credit card company if your debt goes to collectors. A lower rate means it will cost you less to carry the balance while you pay it off.
You can gain a lot more control over every aspect of your life once you control your finances. By following the above steps, you will be on the way to getting that control.
Salaries for college grads this year will average $50,199 according to Kiplinger.com. That’s 7.6 percent lower than it was in 1999. So how do you get ahead?
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Looking for financial security in these down times? Knight Kiplinger shares fundamental lessons for building and maintaining a sense of financial security in your life.
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Americans are beginning to gain ground against the worst recession in recent history as more and more economic indicators point to recovery. A new study from the Federal Reserve says household net worth in the U.S. soared $2.1 trillion during the last three months of 2010.
Gregory Daco, U.S. senior economist for the research firm IHS Global Insight says household liabilities rose just 0.2 percent during the fourth quarter of 2010 as consumers took on more installment debt but continued to pay down existing mortgages. Outstanding mortgage debt fell by 0.3 percent.
The latest figures are a good sign for the mortgage market as it struggles to get a handle on delinquency numbers in the millions. The increased net worth should translate into stronger household finances and fewer homeowners who are unable to meet their mortgage obligations.
Market analysis from the Mortgage Bankers Association (MBA) does indeed point to a decline in new delinquencies in recent months.
MBA reported last month that the overall delinquency rate for single-family mortgage loans dropped to 8.22 percent at the end of 2010, as the numbers fell in all past-due buckets.
Mortgages only one payment late – 3.25 percent of all outstanding home loans – have now fallen to the pre-recession levels of late 2007, according to MBA.
If your New Year’s resolution involves your finances, a great first step is to check your credit report.
Vowing to manage one’s finances better in the New Year could be an appropriate resolution for almost anybody. You can get a bird’s eye view of what your finances look like simply by checking your credit report since it contains such a wide variety of important elements you may need to address in 2011. Checking your credit report is a must-do if your resolution is specifically raising your credit score.
One’s credit score is calculated by the 3 major credit bureaus (Experian™, Equifax™, and TransUnion™) by collecting information such as bill payment trends, outstanding debt and the number of open accounts from your lenders and creditors. Consumers should also be aware that the 3 major credit bureaus do not all report the same information so it is wise to see a report from each of them. Because this score affects whether or not funding is granted to consumers, having a good credit score is very important.
By checking your credit report, you will see a treasure trove of financial information. It’s also good to obtain your credit report prior to beginning any type of loan application, especially prior to starting the home mortgage process.
Get a head start on raising your credit score in 2011 by getting a free copy of your credit report. Everyone is entitled to one free report annually from each of the three credit bureaus. You can request your free credit report by going here.