The Family First
Newsletter
Promoting family unity one issue at a time
Vol. 11 Issue 8 - Week of March 10, 2008
ISSN: 1527-6201
©2008 - Joyce Pierce --All Rights Reserved
Good morning!
This week I
wanted to share an article written by a good friend
of mine, Terry Rigg. Terry has a great
ezine called the Budget Stretcher.
You'll see by
reading this article how staying a step ahead of the
debt collector requires preparation and goal
setting.
7 Ways To Beat The Debt Collector
By Terry Rigg
With record bankruptcies, mortgage
foreclosures and prices
skyrocketing, it's more important now than ever before to
properly and effectively manage your personal finances.
Statistics show that most people could
manage very well on the
income they have now if they were able to keep their bills and
expenses within their income. Sadly, too many people do not
understand how to do this or how to recover once they have
overextended themselves.
Personal Money Management is not a one
step process. Simply
having a budget in place or keeping up with your checking
account isn't enough. You need to follow a set process that
covers several aspects of money management. Here are the basics
of this process:
#1 Set Your Goals
Most people think of setting goals as
strictly long-term like
retirement and college for the kids. While these are very
important goals they are just the beginning. You need to decide
what you and your family want your future to be and make all
financial decisions with that in mind. This could include things
like setting aside money for an annual vacation, replacing your
car or home repairs.
#2 Find Out Where You Stand Now
It's absolutely necessary that you know
what you have coming in
and what you have going out. While a pre-set budget form is best
to accomplish this you can do it on a piece of notebook paper.
Just right down your bills and expenses in one column and your
income in another. Then add them up and subtract your expenses
from your income. You will know at a glace if you have money
problems.
#3 Develop A Budget You Can Live With
There are literally thousands of budget
sample forms available
and most are very effective. However, many have as many as 50
categories of expense items you must keep up with to make it
work. This requires entirely too much time and effort and are
usually abandoned within a few days or weeks. Find a simple
budget with very few categories and once set up only requires
your attention for a few minutes on payday.
#4 Cut Expense In Every Budget Category
You Can
There are thousands of ways to cut your
expenses and not change
the way you live. As an example, the current trend that is
saving a lot of money is to eliminate your land line and use
your cell phone as your primary phone. It's a fact that most
people could cut their monthly expenses by 10% or more leaving
that money to be used for more important purposes. The internet
is the best place to get tips that you can use.
#5 Set Up A Debt Repayment Plan
Consumer debt is robbing people of
hundreds of dollars each
month in interest charges and late and over limit fees. Your
goal should be to eliminate all of your debt as soon as
possible. There is a simple process called snowballing that will
allow you to pay off your debt much earlier and save you
possible tens of thousands of dollars in interest charges.
Basically, snowballing is where you add
up all of your minimum
payments and choose one bill to add extra money to the payment
until it is paid in full. Then you take the extra money and the
payment you were making on bill 1 and add it to the next bill
and so on. The extra money you add doesn't have to be much. Just
adding $25 will pay down your bills much faster because the
amount of money you have allotted for bills remains the same
until all of your bills are paid off.
#6 Know Your Credit
Your credit rating, or credit score, is
very important when
obtaining a loan. As an example according to
Myfico.com, show
that for a $300, 000 loan, an individual with a credit score of
760-850 would pay $1745 and an individual with a credit score of
500-579 would pay $2676 per month.
The only way to really know what your
credit looks like to
lenders is to obtain a copy of your credit report regularly.
Residents of the US can obtain a free copy of their credit
report from the three credit reporting agencies each year. I
urge you to get your free copies by visiting
https://www.annualcreditreport.com/cra/index.jsp
#7 Look For More Sources Of Income
If your paycheck doesn't stretch far
enough to cover all of
your bills and expenses you may need to look for additional
sources of money to cover everything. I would employ the expense
cutting method mentioned above first but if you still can't make
it then more money would help.
Each of us have our own specific talents.
Trying to come up
with a one size fits all method of generating more income is
next to impossible. But, if you take the time to really look at
the talents you have you will probably find that you could use
them to provide a product or service that people are willing to
pay for.
Like I said, these are just the basics.
There are other areas
of personal finances that are just as important like investing
and building your personal wealth, but those are topics that you
can concentrate on when you have the basics covered.
If you aren't aware of where you stand
financially you may be a
victim of what I call "Financial Complacency". That is simply
defined as not being willing to put in the time and effort
necessary to control all aspects of your personal finances.
Normally, this is a result of being confused about your money
and how it should work because you were never taught the right
way.
Simply by making a concerted effort to
properly manage your
money will go a long way toward solving any problems you may
have. You may be surprised at how easy the solution can be.
Terry Rigg is the author of Living Within
Your Means - The Easy
Way
http://www.homemoneyhelp.com/ebookadpage3.html and editor of
the Budget Stretcher web site. To Subscribe to The FREE Budget
Stretcher Newsletter and receive The Complete Budget and Bill
Organizer absolutely free just visit his home page at
http://www.homemoneyhelp.com
What are you doing to make 2008 GREAT?
Joyce Moseley
Pierce
www.emersonpublications.com
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