Putting the Personal Finance Puzzle Together before Your Life Falls Apart
by Suzanne Rekow
It
only takes one unexpected expense or income shortage to unravel your
financial safety net when you're living pay check to pay check.
Luckily, finding financial security is more feasible than you think.
The big picture
There are thousands of books, websites, and classes on financial
planning. However, putting all that information together, and then
applying it to our lives, is like trying to solve a 5,000 piece jigsaw
puzzle without the picture on the front of the box. You'll never get
control of your personal finances until you see how all the elements,
such as debt, taxation, spending and savings, fit together.
Debt reduction
If you feel like you're drowning in a sea of debt, you're not alone.
According to The Federal Reserve, about half of the American population
is heavily burdened by unsecured debt. Many so-called solutions, such
as Consumer Credit Counseling services and bankruptcy actually make
problems worse by dragging out payments and ruining credit.
If your credit card debt is out of control, consider calling a debt
negotiator. Unlike Consumer Credit Counselors, debt negotiators can
actually work with your creditors to reduce your debt up to 40% without
affecting your credit score.
Tracking Expenses
People who accurately track their expenses discover that they are
wasting, on average, $312 a month. That's hundreds of dollars you could
be using to live within your means, pay off debt, or save for your
future. Keeping up with your spending habits is the first step toward
seeing the big picture. To make it easier, try using personal finance tracking software to find out where every penny of your pay check is going.
Saving for a rainy day
Only 3 in every 100 Americans are financially ready for retirement.
Failing to save for retirement or unexpected expenses is one of the
biggest financial mistakes you can make. Many people look at savings as
something they will do after they buy all the things they want and pay
off all their debt. This is backward thinking.
Instead, think of the money you set aside as pay checks for the future.
Pay yourself before you pay creditors, buy goods and services, or
indulge your loved ones. By setting aside a percentage of income each
month you can strengthen your financial safety net, while still meeting
your current wants and needs.
Feeling taxed?
Most Americans are over-paying their taxes by as much as 49%. The
easiest way to build wealth is to keep more of the money you already
make and that means giving the IRS only what it expects when it expects
it, and nothing more. A little knowledge of tax laws and tax
preparation can go a long way to increasing your income.
Don't rely on an accountant to save you money come tax time.
Accountants not only charge high hourly rates but always lean toward
conservatism with regard to deductions in order to avoid possible
penalties for wrongfully counseling clients. This protects their
pocketbook, but usually not yours.
Knowledge leads to financial power
Fight for financial freedom of many fronts, not just one. Look for
financial information and resources that provide comprehensive tools
that help you, track spending, reduce debt, avoid over taxation, and
save for your future.
Download a free, comprehensive, e-book on financial planning today at MoneyMastery.com and secure your financial future.
About the Author
Download a free, comprehensive, e-book on financial planning today at MoneyMastery.com and secure your financial future.
