As we begin the New Year, the nation’s economy is crumbling. It is becoming apparent that protecting your finances is extremely important in addition to protecting your identity. To get you off on the right foot, we have listed several tips and suggestions to get your financial house in order.
1. Make sure you know the difference between your needs and your wants. Financial security depends on you spending money in the smartest possible way. For instance, gasoline is a need while ordering a pizza is a want. Frugality is absolutely a necessity. Clip coupons and watch for sales or deals on things you will be needing soon.
2. Have a cash stash that is equal to approximately 6 months of living expenses. Average out your utilities, food and other expenses and save some for a rainy day. Put a little back each payday in an account that you cannot touch or dig into. This is your emergency fund and shouldnt be touched unless it is absolutely necessary. If you DO dig into the fund, that money needs to be replaced as soon as possible.
3. Categorize your bills and start to pay them down or totally off. Start with personal loans, then move onto credit cards. It is important that these responsibilities be taken care of as quick as possible. The interest accrued by credit cards and loans is staggering over the span of the life of the loan.
4. Protect your Identity. Identity theft has become the crime of choice in recent years. It costs victims on estimated 6 billion dollars a year to pay for identity theft. You can protect your money and your identity with a service like Life Lock. Life Lock is a service that guarantees protection of your credit backed by $1,000,000 to you if they don’t. They help to reduce the amount of credit card offers you receive and pro-actively monitor your credit.
5. To keep away the temptation to spend all your hard saved money, put money into CDs other financial securities that are harder to dip into. That way you won’t have easy access to spending the money, and will therefore be less likely to spend it.
6. Put yourself on a budget and KEEP that budget no matter what. This is easy to do, folks. Make up jars or boxes with labels like entertainment, pizza, or eating out. Each payday, put $20 in each jar. That is your allowance for that extravagance until next payday. When the money in the pizza jar is used, you simply dont eat pizza again until next payday rolls around. Sounds a little harsh, but it works and you HAVE to limit yourself or you will have no idea where the money went to.
The status of the current economy is awful, but that isn’t a secret. Therefore, we must look for ways to protect ourselves and our financial situation so that we don’t need the kind of financial assistance that some of the big companies have needed. Don’t let any of that nonsense happen to you this year. Keep a budget, look for deals, and spend smart!
If you are cautious with your money, you will not need a bailout in 2009. Hey, maybe you may be the one bailing someone else out.
Linda Seamore is an expert on the subject of personal finance and has written many articles on it and on credit protection programs like LifeLock. She suggests researching all credit protection programs like www.lifelock.com before signing up.
categories: Personal Finances,Savingsd,financial security,Finances,Money,Investments,Budgets,Retirement