TO BE FREEDOM OF FINANCIAL

Have you ever tracked all your expenses for a single month? You can do this by getting all your receipts and writing down everything you spent money on – from utilities to fast food meals. If you’re like most people, you found something shocking. Don’t be embarrassed. It’s better to catch bad spending habits now rather than later. There may come a time when you really need the extra money and you’ll regret spending it all on a few items you didn’t really need.

What’s the next step? If you want to take a real financial assessment of your life, then take a closer look at each expense category to see which items can be reduced. You also need to list your long term goals and your short term goals, because that will motivate you to make needed changes.
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Many people want to save for their retirement but never get around to it until it is too late. There are three ways you can save for your retirement without feeling the crimp.

First, balance your budget. Many people do not have a budget much less a way to balance it. However, if you start with knowledge of where your money is going you can understand what to do with it. There is a reason to have a budget. To track your spending. If you cannot track your spending then you cannot save for retirement.

Second, switch an expense into retirement “spending”. People do not like to “save”. It doesn’t feel as good as “spending”. Why not think of it this way – you are spending today for your future by putting the money away in an account. It’s easy if you do things like cut your cable bill and turn it into your retirement account.

The third way is to put the money in the right place. Some people think there is one right way to save for retirement but that is not correct. You can simply put the money in a savings account or you can put it in the stock market. There are different levels of risk associated with that of course.

So you need to figure out how you feel about risk before making that decision. People who are young have more time in their life and thus they can take the time to try riskier investments like stocks. People who are older have less time left so they need to work on a plan to save their savings.
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Nearly everyone can benefit from a budget. Creating a budget is really about keeping tabs on your money and knowing what your limitations are when it comes to expenditures. Whether you’re trying to climb out of debt or deciding how to enjoy a surplus, a budget puts you in control.

Make a budget: Making a budget is a great way to keep track of your finances and calculate exactly how much money you are making and spending each month. An accurate budget will allow you to identify all of your necessary expenses, which in turn will give you the ability to calculate exactly how much you can afford to spend every month so that you can live a debt free live. Spend less, and save more. Creating a budget is an important first step to building sound money management skills. It is an estimate of income and expenses over a period of time. Sit down and make an account of all your income and expenses. First, list all your income. Next, list each of your fixed expenses, the ones that don’t differ from month to month. Those may include your rent or mortgage payment, your auto loan payment, and your utilities if you’re on a budget plan to pay for them. Next, add in necessary expenses and payments on bills that vary from month to month. Finally, list all your daily and regular expenses for entertainment, transportation ECT. Your goal is to develop a budget that lets you meet all of your monthly fixed expenses, and figure out where you can cut expenses to start paying down your credit card debt and get escape from debt.

Cut all your non-essential expenses: Non-essential expenses include most of the things we don’t need, and most often includes many items where we waste money the most. It includes spending on clothing, books, movies, magazines, video games, dining out, gifts, snacks, candy, shoes, etc.

Calculate your net income: Your net income is what you have left over after all the bills are paid. You want this to be a positive number so you can put it toward your debt.

Make a list of creditors: with name, address, phone number, credit card number, expiration date, and security code. Pull out all current statements and make a list. Write down the balance owed, interest rate, current minimum payments. Find out if the interest rates are fixed or variable, it will be worth the effort as those variable rates will need closer monitoring. Communication is one of your best tools to help you through difficult financial times. Your creditors would really prefer NOT to take stronger measures to collect the money that you owe them. After all, it costs them more money to refer your debt out to a collection agency. As soon as you know that you’re having trouble making ends meet, call your creditors and explain the situation. In most cases, they’ll be happy to work out a modified payment plan that will make it easier for you to meet monthly expenses. It may mean extending the period of your loan, or renegotiating the terms of a loan agreement, but in the short run, it will take the heat off and in the long run, it will save your credit rating.

Debt plaques many people. By constructing your budget in detail, you will be able to see what your money is accomplishing. Learn how to track your expenses and income and watch your savings grow!