Financial Tips for the Rest of the Year

Only 4 more months left until another year.  Did you follow any of your New Year’s Resolutions? It’s not too late. Hopefully one of your resolutions was to improve your finances.  Finances are a big part of your life.  Finances can destroy relationships; result in divorce, arguments, sadness, depression, anxiety, fear and health issues. Finances have to be properly managed.  Exterminate bad spending habits. 

One key to improving your finances is to set financial goals that you know you will be able to achieve.  Make a promise to yourself that you will do at least one thing to become better at managing your finances.   Make sure your goals are positive statements. A goal should be similar to an affirmation, i.e. I will pay off my Visa bill by March 2013 instead of an uncertain or negative goal such as, I hope I can pay off my Visa bill by March 2013 or I will try to pay off my Visa bill by March 2013. Here are 13 easy ways to help you improve your finances through the rest of the year. 

1. Change Your Mindset.  Change the way you think about money. If you believe you will always be in debt or always be broke you will.   
2. Develop a Financial Plan (Budget). Write a list of your entire total monthly expenses including debt and write down your total monthly income after taxes.  If you do not have any money left over (at least 10% of your monthly income) look at the areas where you can reduce spending.
3. Spend less.  Reduce spending by 30-50% each month. You should always have extra money left over each month after you pay your monthly expenses; if you don't you need to change your spending habits.
4. Save. Do at least one thing a week to save money, i.e. bring your lunch to work or bring coffee from home one day a week.   Create an emergency fund with enough money to cover at least 9-12 months’ worth of monthly expenses.
5. Get Out of Debt. Get current on any late payments. Negotiate with creditors to setup payment plans and pay off all debts. This will increase your credit score.
6. Limit Credit Card Usage. Use your credit card for emergencies only.  Keep credit card balances at 20% or less of the credit limit. Pay balances off at the end of each month.
7. Develop What If Scenarios.  List different scenarios that could happen and how you would deal with each one, i.e. job loss, sickness, death, new baby, loss of health insurance or other benefits, car repair, etc.
8. Get Your Financial House in Order.  Organize financial papers and store in a centralized secure location. Backup financial documents and records saved on your personal computer.  Make copies of all personal documents and store in a waterproof fire proof safe.  Develop a will and update beneficiaries for life insurance policies.
9. Get insured. Make sure you have adequate health, auto, life, disability and long-term care insurance.
10. Don't stop at retirement. Don't just plan for your retirement, plan for your children's retirement. If you plan for your children's retirement or your grand children's college education this will ensure you have more than enough money to retire and enjoy your golden years.
11. Do better than your parents.  If you parents retired at 65 or had to work until they were 70 and had nothing to show for it, do better than your parents. If you retire at 55 be sure you have at least enough money to live on for 20 years.
12. Further Your Education.  Take training classes or get a college degree to increase your skills set and salary. Plan to take at least one training course every year during your career to stay current with industry standards and technology advances.
13. Consult a professional.  Contact a financial advisor or financial planner to help you determine your financial goals, where you want to live, the age you want to retire and the lifestyle you would like to have when you retire.