Spring is a time of rebirth and growth. It is also traditionally the time of year when people throw open the windows and tackle their spring cleaning. This year, after months of bleak financial news, make sure you include your finances on your spring cleaning to-do list. For people who have suffered the loss of employment or watched their savings dwindle this is a great opportunity to regroup and make adjustments to ensure your finances are in order.
Here are a few items that should be on your financial to-do list:
When the economy takes a turn for the worse it is a common reaction to deny the reality of your financial situation. Unfortunately you cannot wish the financial crisis away, instead you must take action by taking inventory of your finances. This may include learning how your income and expense needs have changed. Re-visit your budget to learn where you can make adjustments by cutting costs and reducing expenses. This may require examining your lifestyle and eliminating money spent on things you want versus things you need.
Live Below Your Means
People who wish to get their financial house in order must learn the importance of living below your means. To put it simply in order
to find true financial security you must spend less money than you make. This has become a foreign concept in our society as more and more people use borrowed money to live beyond their means.
Ditch Your Debt
There is no better time than the present to develop a plan to eliminate your debt. High interest credit card debt will rob you of money that would have been better spent in other areas. Address your high interest debt by picking a strategy that will work for your situation. The snowball method is a popular way of paying off debt. In short you tackle one account at a time and apply as much money as you can afford (see cutting costs and living below your means) while paying the minimum payment on other accounts. Once you pay off the first account you then apply the same amount of money you were paying to your next account and continue this process until all accounts have been paid. This method requires a bit of sacrifice and discipline on your part but getting rid of that high interest debt is worth the effort.
Examine Your Priorities and Goals
It is very easy to become overwhelmed by trying to do too many things at once. This commonly occurs when people decide to take a hard look at their financial situation. If you try to take on too much at one time you may find yourself spinning in many directions without really going anywhere. In an ideal world it would be possible to eliminate debt, build your savings and increase your income all at the same time. In reality most of us have only so much money to work with. For this reason it is important to take a serious look at where you are and where you want to be in the future. By setting short and long term goals and developing a strategy to achieve these goals you are more likely to be successful in your endeavors.