Plan for Your Finances

Are you planning to make a major purchase in the upcoming year? Maybe you want to save for a down payment on a house, a car, or make the move toward becoming debt free. If you want to be successful, you must develop a plan of action. To put this in perspective and determine where you are headed, you can start by examining your current financial situation.

1. Get out your bank statements, credit card statements, and pull out your calculator. Take a good look at where the bulk of your money is being spent. You can set up a simple spread sheet or something handwritten for this exercise. You should include a column for your utilities, monthly bills, and expenses. If the bulk of your money is going toward splurging on clothing and other items, perhaps you should curve your spending habits to reach your goals. Maybe you should skip those pair of two hundred dollar shoes this month or consider shopping at a discount outlet. Nordstrom is the perfect example for this:  They have a department store which offers items at full price, but they also have an outlet store, where you may be able to find some decent bargains.
2. Credit card blues got you down? Are high interest rates causing concern? Every dollar counts towards the goal. Most people call their creditors when they have a problem with their statement or a payment issue. Have you ever considered contacting them to see what you qualify for? If you have a pretty good record with them, ask your representative if you qualify for any special interest reduction offers. You may be pleasantly surprised at the answer you receive. If you are carrying an annual fee, there may be an opportunity to remove it, reduce your interest, or move into a different program. The most important thing to remember is, "It never hurts to ask!" Cover all your bases.  If you are attempting to reduce the balance you are carrying on your credit card accounts, don’t stress yourself out by trying to do too much at the same time. Look at the smallest balance you are carrying and start by paying it off one by one. Don’t close your account; however, this will impact your fico score. Always remember that paying down credit card debt will help to increase your debt ratio, which in turn improves your fico score.
3. Our lifestyles are ever changing and on the go! Let’s talk about fast food for a minute. When I was looking at ways to cut cost I had a revelation about this one.  The average cost of a drive through breakfast is roughly $5.00. If you’re doing this every day, like many of us do, that’s $25.00 a week. By the end of the month, you’ve spent $100.00 on breakfast alone. The same would apply if you’re grabbing your lunch from the local deli down the street. To get a better perspective, we have 52 weeks in a year. If you multiple $25.00 times 52 weeks, you are spending $1300.00 per year. Consider going to the grocery store and bringing your lunch and breakfast.  The more you cook, the more you save! Not to mention it’s healthier for you.  Consider skipping that cup of coffee at the shop, and get out your coffee makers at home and take that along with you instead.
4. Pray and ask for wisdom and guidance concerning your finances. Track your progress by maintaining a spreadsheet or ledger. Stay focused, and remember; "All things are possible with God." Here is your food for thought: “Almost any man knows how to earn money, but not one in a million knows how to spend it.” Henry David Thoreau (1817-1862).