It's never too early or too late to take control of your finances
(BPT) - "Silly season" - the months of campaigning that lead up to a presidential election - is well under way, and it's a sure bet the country's money, finances and spending habits will be favorite issues for politicos of all persuasions. But while the debate and rhetoric is sure to be heated on both sides of the political fence, taking control of finances - specifically, your personal ones - is something worth considering this year.
"It's never too early or too late to educate yourself about your finances and to take control of your spending and saving," says Dr. Willie White, program chair and accounting instructor at Everest College in Aurora
, Colo. White offers four tips to help get you started:
1. Assess your finances
Make a list of all sources of income and expenses, including: mortgage payments, rent, utilities, car payments and insurance and credit card payments.
If you recently experienced a significant change in your personal or financial life, then you may also benefit from consulting a financial professional. Even if you have to pay some money up front, a professional financial manager can help you identify possible tax breaks, or advise you on possible debt management strategies.
Dr. White also advises you to get a copy of your credit report; you can access it for free by visiting www.annualcreditreport.com.
2. Organize your finances
After you've assessed your situation, make a monthly budget with concrete, manageable goals. Set aside a certain time each week devoted to managing your finances, and automate as many of your payments as possible.
If you are not sure how much you currently spend, then you should keep a "financial log" for one month, in which you record all expenses on discretionary items such as food, gas, clothing, etc. Transition to online payments. "Paying your bills on time not only will save you money by helping you avoid late payments, but it is a crucial first step to building your credit score," says White. Moving to automatic deductions not only makes sure your bills are paid on time, but can also save you time and hassle.
3. Start saving
"There is only one rule to saving - spend less than you earn," says White. The key to saving is to create and commit to a reasonable budget that includes manageable savings goals. If possible, have a set amount go directly to your savings account by automatic deposit.
To make the most of your saving, White suggests you see if your employer offers a 401k as part of your benefit package, which allows you to deduct savings automatically and actually reduces your taxable income. If your employer offers a matching 401k option, maximize your savings to take full benefit of the matched amount.
4. Deal with your debt
For many, credit card debt can seem overwhelming, but there are a number of steps you can take to feel in control of your payments again. "Your first step can be to cancel credit cards with annual fees," advises White.
Dr. White also urges you to consult debt consolidation companies, which gather debt from various credit cards under one umbrella account, and help you reduce monthly payments.
However, the most important piece of advice Dr. White offers is to get informed. "The more you know about your finances and your options, the better consumer and investor you will be," says Dr. White.