Make Time For A Financial Tune Up
Every three months, the chief financial officers of publicly traded companies must prepare a quarterly statement that informs their stockholders of how well the company is doing. This will include a balance sheet of income and expenses. It is a good idea for everyone to regularly review their personal finances. If you made New Year's resolutions to improve your finances, this is a good time to see how you are doing. Here are tips to get you started:
Treat it like a business: To gain the most complete overview of your finances, treat this as if it were a report you are making to stockholders. Gather all of your most recent credit card statements, bills and outstanding debts to determine what you owe. Pull together your paycheck stubs and any records of bank account interest or investment income to determine what money you will have coming in. If you can't find these easily, set up a system to organize your records.
Call a stockholders meeting: Don't review your finances over dinner or during car trips. Get the family together to focus on your financial goals. Finances are a family affair and everyone needs to understand how you spend your resources. For example, if a big vacation this summer is the goal, discuss how much it will cost and how to save for it.
Review what others are saying: If you ordered your annual free credit report, now is a good time to review it and report any errors to the reporting bureaus. If you haven't ordered it, spend a few minutes at the end the meeting to quickly order your free copy by logging onto www.annualcreditreport.com, a service created by the three major nationwide consumer reporting bureaus.
Set deadlines: Review if you paid all of January and February's bills on time. If not, add up how much you paid in late fees and charges. Now, get out a calendar and circle the dates you get paid and add in the bill due dates. Look at the money you'll save in late fees and added interest as a bonus you'll receive for meeting the deadlines to pay your bills on time.
Revise the business plan: While you have the calendar out, count up how many days since January 1. Have you saved at least a dollar a day? If not, it's time to start. Get the Sunday paper and clip coupons or download online coupons to save $5 to $30 per week at the grocery store.
On the road to profitability: All stockholders are concerned about their company's level of debt. Compare your level of debt now to one year ago. How about at the start of the year? Make an effort to pay off any extra debt left over from the holidays. Stay up to date with any debt management programs in which you are participating.
Utilize outside consultants: Unlike businesses, you can consult with a team of experts and not have to pay them a penny. A non-profit credit counselor, such as those who work at American Debt Counseling, Inc., will go over your individual finances at no charge in a confidential manner and discus concrete steps you can take to improve your financial situation.
Set a crisis plan: Companies have special contingency funds set up to handle unforeseen emergencies. Review your insurance policies and your savings that will see you through an illness, eviction, job loss or natural disaster. Typically, an emergency fund should have three months of living expenses.
Review operations: Motion sensor lighting and less expensive packaging are ways companies reduce the costs of doing business. Consider reducing your costs by buying rechargeable batteries and more efficient lighting. Make it fun by having a battle of the brands and testing less expense store brands against the name brand items you buy at the grocery store.
Add yourself as preferred vendor: Every expert on saving money urges consumers to pay themselves first. Analyze the total amount you spent in January and February against the total amount you were able to save. Decide on an amount, even as little as $5 or $10, that you can commit to putting aside before paying any bills each month to build up your savings.
Reward regular customers: Saving is a hard job and you deserve a bonus for doing it well. Set intermediate savings goals and realistic rewards. Keep track of the money you save and claim your reward without any guilt. For example, if you save $100, treat yourself to a DVD that you don't really need but would like.
