1. Set real, measurable goals. “I want to save money” is not a goal. “I want to save $50 per week” is a goal. “I want to save $50 per week so I can buy a $5,000 car in 100 weeks” is a clear, measurable goal. If you goal is clear and measurable, you are much more likely to succeed.
2. Make a plan to reach your goals. You want to save $300 per month: how are you going to do it? Make a list of specific expenses you can cut to reach your goal, or identify ways to increase your income. A goal without a plan to achieve the goal is not a real goal.
3. The best way to reach your goals is by making a personal budget. A budget is just a list of what comes in and what goes out every month. It doesn’t have to be fancy. Use a piece of paper and a pencil, or a computer, but put it in writing! You need a list in front of you to see what you can cut.
4. If you have debts, make a plan to pay off your debts. Every financial expert will tell you to start a savings plan, but if you are in debt a savings plan is not your priority: your priority is to get out of debt. Start by making a list of your debts: write down the name of the lender, the amount owing, and the interest rate. Many people have no idea how much they owe in total until they write it down. Then, prioritize your debts in the order that you want to pay them off. Don’t make the mistake of trying to repay your smallest debts first so that you have fewer bills to pay; instead, start with your highest interest rate debts. Paying off a department store credit card with a 25% interest rate will save you more money in the long run than paying off your line of credit with a 10% interest rate.
5. Finally, if your goal is to get out of debt, and if your budget tells you that it will be impossible to deal with your debts on your own, research your options and then get professional help.

There are lots of resources on the internet to help you get out of debt and succeed with your financial New Year’s Resolutions, but only if you do the work and start now.

J. Douglas Hoyes is a chartered accountant and licensed trustee in bankruptcy, and he works with people in financial trouble. More information on New Year’s Resolutions can be found on the Hoyes Michalos blog: http://www.hoyes.com/blog/2009/12/top-five-tips-for-financial-new-years-resolutions.html

How much time would like to spend budgeting for your personal finances each month? Hours? How about 20 minutes. To be a winner, you’ve got to be as honest as possible on paper. If you are, you’ll know exactly how your money comes into and goes out of your life, and you’ll be able to take complete command of that process.

First, dig up all the dirt on yourself. Get out all the bank account statements, investment statements, bills, receipts you can find. Everything that documents money coming or going. You want to be able to get a monthly average – the more information, the better.

Next, list all your different income sources. Beside your regular job, document any other income sources. If your employer already takes taxes out of your paycheck, just use your net pay numbers. Add all of this up and label it “monthly income”.

Next, get together all of your documented expenses. From your past bills, you should be able to come up with a reasonable prediction of how much you’re going to pay in bills in the coming month. Everything from mortgage to car loans, grocery bills to gas bills, insurance to investments, savings – everything you spend money on goes in this section.

Take all of these expenses and divide them into two categories: fixed expenses and variable expenses. If a certain bill stays pretty much the same from month to month, label it “fixed expenses”. This would be your mortgage, car loan, cable/satellite bill, and others like this.

You’ll find that most things in this category are quite essential, but seldom change in amount. Next, take all your expenses that change on a monthly basis: gas, food, clothing, eating out. Label them “variable expenses”. You’ll find that you can be pretty flexible with the items in this category.

Add up your income. Add up your expenses. If you have more income than expenses, you’re in a good starting point. You can take the money that’s left over and do something with it like put it in savings or pay off debts.

If you’ve got more expenses than income, you have to change one of the categories. You can either increase your income or decrease your expenses. Remember, the goal is to have equal income and expense numbers. Money left over is sure to be wasted.Every nickel should be assigned a category by the end.

Anyway, the first place you can cut easily is in your variable expenses.These are your non-essentials; it’s easier to do without a dvd rental than having your electric shut off.

Finally, every month go over your budget. If you check your progress every month, you’ll start to make headway. These review sessions are much easier and shorter than the initial budgeting session. You’ll have a chance to see where you succeeded and where you need a little more work.

About the Author

Stephen Blauert. Now that you understand how a solid budget is the foundation for building real wealth, find out how to create and maintain a budget in 20 minutes per month at http://howtobudgetmoneyandsave.com/money-tree-review.

!inlineRSS:news_financialplanning

1. Are you aware of my goals? If you want to buy a house in the next 5 years, your money will be invested differently than if you don’t want to touch it for at least 10 years.
2. What is your investing style? Stocks, bonds, mutual funds, Large-cap, to name a few. Many financial planners specialize in certain areas of the market and you want to ensure it matches your goal and you remain diversified.
3. What is your strategy with my portfolio for my goals? You want to make sure they are aligned with your risk level.
4. What are your commissions and how do you get paid? There are two main ways financial advisors get paid: flat fee based on a percentage of assets (average is between 1-2%) or a commission based on sales. Make sure you know how they are getting paid. If they say they don’t get paid by you, remember they ALWAYS get paid.
5. Will I be able to speak with someone regularly? Or will you be calling me regularly? Some advisors seem to forget about their clients. You are paying a lot for service so you want to make sure you get it!
6. What kind of periodic reports will I receive? Will I meet with you regularly? Have them go over the reports with you.
7. How many years of experience do you have? And what did you do before you became a financial planner?
8. What are the names and numbers of other clients that can serve as references?

You can also check an advisor or broker’s record with regulators by phoning the National Association of Securities Dealers at 800.289.9999 or visiting www.nasd.com.

There are also fee-only financial planners that get paid on a hourly basis. Many of them are completely independent. Therefore, they will be able to give you an unbiased analysis of your personal finances. To get more information, National Association of Personal Financial Advisors (fee-only) www.napfa.org. At the end of the day, it is going to be about your connection with the financial planner. With that being said, don’t forget about the financial fundamentals and how they benefit you.

About the Author

Galia Gichon, Founder of Down-to-Earth Finance, demystifies personal finance – particularly to women – through unbiased financial education. With over 14 years experience in financial services and an MBA in Finance, she does not manage money or sell investment products. You can subscribe to her weekly e-mail newsletter at DownToEarthFinance-On@zines.webvalence.com for smart tips to save more money and independent advice about mutual funds and retirement. She can be reached at 212.734.0433 and http://www.downtoearthfinance.com
Written by Galia Gichon
DOWN-TO-EARTH FINANCE
(Copyright Down-to-Earth Finance LLC 2006)