Are you living within your means? Many Americans spend more than they are saving, thus, gradually going deeper into debt. According to the Federal Reserve statistics, “consumer debt has more than doubled in the past 10 years” and the average American family has taken on more debt than can safely handle. How can you avoid falling into this pitfall and build wealth? Here are 5 simple tips to financial wealth.
Create a monthly budget
This is key to controlling your monthly expenses. By creating a budget, forces you to examine your income and expenditures to track how much money you make and spend. Of course your living expenses, i.e., mortgage, utilities, vehicles, insurance payments and food are a must, but additional payments should be allocated to pay off bad debt.
Many financial planners agree that this is the most effective way to manage your finances. Tamara Haskins, CEO and Founder of Haskins Wealth Management Group, Inc., says, “We are educators who believe in providing our clients with the information and resources that empower them to make smart financial decisions.” Haskins, with over 20 years of experience in accounting and financial planning, is National Expert Advisor for Natonal Association Women on the Rise (NAWR), and offer members the Women, Money and Power series. As a gift, she has offered a free downloadable Financial Personality Worksheet.
A few handy financial tools:
- HomeBudget is an expense tracker designed to help you budget, track and control your monthly expenses at home.
- Moneytrackin is a free online web application that allows you to track all your expenses and income easily and without effort, thus allowing you to have a clear view of your financial situation. It intends to be a simple yet powerful online budget management tool.
- MySpendingPlan is an online tool that provides consumers with the latest tools to help them manage their personal finances track their budgets, save money and keep up on the latest information about managing money and leading a better financial life.
- Pro on Go is a mobile application that helps professionals manage and submit their business expenses with ease and efficiency.
- Quick books is a good tool designed to help you manage financial information more easily. This software helps in accounting, bookkeeping and managing your income and expenses.
Control your spending habits
This is a major leap into fixing your money problems. Be firm with yourself and critically look at every purchase. Ask yourself the following:
- Why do I want or need it?
- How would it benefit me if I had it?
- What other things would change if I had it? (for better or worse)
By ‘self-talking’ allows you to determine if this is a ‘want’ or ‘need’? If you can’t justify making the purchase, then chances are, you don’t need it! Becoming disciplined is critical!
A few years ago, my husband gently informed me that I was spending way too much. So, I took a critical step by destroying all of my credit cards except for the one with the lowest interest rate. Today, we are debt free and I keep one credit card for emergencies.
Invest wisely
Having an investment plan is the key to long term success. There are a lot of options out there, so I suggest you speak with a financial advisor.
Save for an emergency
With the economy being so weak, sometimes it takes every penny that comes in to make ends meet. You must get out of that mind set and start saving on a regular basis. Start small and increase as time goes on. Consider setting some simple and manageable goals so that you challenge yourself to reach them.
Know your credit
Make sure you order a copy of your credit report from one of the three major credit bureaus:
- Experian: http://www.experian.com (888-397-3742);
- TransUnion: http://www.transunion.com (800-888-4213)
- Equifax: http://www.equifax.com (800-685-1111)
- Free Credit: FreeCreditReport.com
You are entitled to one FREE copy each year. Review your report carefully and report any discrepancies to the credit bureau.
In conclusion, it’s important to measure your financial health regularly. Though becoming debt free is not easy, by following these simple tips will help you manage your debt and become financially wealthy.
Sylvia Browder is CEO of Specialty Home Services LLC, a Home Improvement Company; a Small Business Consultant at Browder Consulting Group, a startup consultancy firm to help women with startup assistance, marketing, website and graphic design work and other support services. In addition, she has co-authored several published books; publisher of ‘Sylvia Browder’s Blog for Women Entrepreneurs’ a lifestyle blog; and publisher of ShopSpendBlack.com Business Directory & Blog platform created to help consumers find black owned businesses in a searchable format. In her spare time, she enjoys spending time with her husband of 30 years; 5 adult children and 5 grandchildren; church; friends and motorcycle riding.
