How To Avoid a Personal Bailout
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. Put away 6 months living expenses into a Savings Account. Estimate 6 months of living expenses by totaling your monthly bills, gas, and grocery expenses and multiplying by 6. Put this amount of money into a savings account. Start by simply putting a little away every month from your paycheck. This will be your rainy day fund and should only be touched in an emergency. If you absolutely must dip into it, make sure that it is for an emergency and that you replace it as soon as possible.
3. Begin paying off your debt. Start with the highest interest bearing loans, like personal loans and credit cards and begin paying them off. These you should take care of BEFORE you begin saving any money. The interest accrued on these loans can be staggering over time and will save you money in the long run if you pay them off first.
4. It has become increasingly more important to protect your identity. Identity theft is becoming the favorite crime among criminals. It is estimated that it costs victims of identity theft over 5 billion dollars a year to pay for identity theft. However, identity theft protection is now offered with services like Life Lock. Life lock guarantees the protection of your credit backed by a $1,000,0000 payment to you fit they don't. They will help reduce the number of credit card offers you receive and will actively monitor you 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. Write out a budget and stick to it no matter what. This is so super easy to do. Label several jars with categories like "eating out", "movie night", or "entertainment". Every payday, put $40 in each jar. That will be your allowance for that particular category. When the jar runs out, you have to wait until the next pay day to replace the money and your budget for that item. This sounds tough, but it can really be of benefit to your finances.
The current economic situation is not good. This is not big secret. As a result, we have to do what we must to protect ourselves from needing assistance, something some of the big companies should have done a long time ago. Don't get in a bind in 2009. Follow a budget, look for sales and discounts and be a smart spender.
If you are careful with your money, you will not require a bailout in 2009. Hey, maybe we can become the example and teach the major corporation CEOs how to do this.
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. Put away 6 months living expenses into a Savings Account. Estimate 6 months of living expenses by totaling your monthly bills, gas, and grocery expenses and multiplying by 6. Put this amount of money into a savings account. Start by simply putting a little away every month from your paycheck. This will be your rainy day fund and should only be touched in an emergency. If you absolutely must dip into it, make sure that it is for an emergency and that you replace it as soon as possible.
3. Begin paying off your debt. Start with the highest interest bearing loans, like personal loans and credit cards and begin paying them off. These you should take care of BEFORE you begin saving any money. The interest accrued on these loans can be staggering over time and will save you money in the long run if you pay them off first.
4. It has become increasingly more important to protect your identity. Identity theft is becoming the favorite crime among criminals. It is estimated that it costs victims of identity theft over 5 billion dollars a year to pay for identity theft. However, identity theft protection is now offered with services like Life Lock. Life lock guarantees the protection of your credit backed by a $1,000,0000 payment to you fit they don't. They will help reduce the number of credit card offers you receive and will actively monitor you 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. Write out a budget and stick to it no matter what. This is so super easy to do. Label several jars with categories like "eating out", "movie night", or "entertainment". Every payday, put $40 in each jar. That will be your allowance for that particular category. When the jar runs out, you have to wait until the next pay day to replace the money and your budget for that item. This sounds tough, but it can really be of benefit to your finances.
The current economic situation is not good. This is not big secret. As a result, we have to do what we must to protect ourselves from needing assistance, something some of the big companies should have done a long time ago. Don't get in a bind in 2009. Follow a budget, look for sales and discounts and be a smart spender.
If you are careful with your money, you will not require a bailout in 2009. Hey, maybe we can become the example and teach the major corporation CEOs how to do this.
About the Author:
Linda Seamore is an expert on the subject of personal finance and has written numerous articles on it and on credit protection programs like LifeLock. She suggests researching all credit protection programs like www.lifelock.com before signing up.
posted by Credit Counseling at
3:49 AM
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