January 9, 2008

Take control of your finances

January is always a great time to look into reorganising your finances, its time when most people have spent a lot of money, but looking forward there are several months of nothing to get things straight. So how can this be done? Surprisingly this can be in few simple steps:

Develop a budget
Start an emergency fund
Track every penny you spend
Get out of debt
1. Order your debts from lowest balance to highest balance.
2. Designate a certain amount of money to pay toward debts each month.
3. Pay the minimum payment on all debts except the one with the lowest balance.
4. Throw every other penny at the debt with the lowest balance.
5. When that debt is gone, do not alter the monthly amount used to pay debts, but throw all you can at the debt with the next-lowest balance.
Open a retirement account
Spend less than you earn
Automate your finances
Educate yourself
Do what works for you

The best thing is to do what you are happy with, there is no need to go to extremes as that will never work, start off slowly and simply.

Source [Get rich slowly]