Monday, January 12, 2009

The Morning After

Christmas and New Year are behind us. The glow of the season has passed. Now the bills are arriving. As my Scandinavian friends would say, "Ufta!" (Or other utterances I won't pass on here!)
It's time to build your resolve, note I did not say resolution as that has connotations of negativity and failure. Resolve according to Webster, analyze, reach a decision and/or being firm.
Financial Resolve
1. Build Your Savings
A. We all know it's easier if the payment to yourself is automatically deducted from your check. Start with that, even if it's a small amount. Put it into an account you don't touch.
B. Empty your wallet every night and take out your change. Save it.
C. Analyze your spending. What can you cut out? Suze Orman in her new book, "2009 Action Plan" has a suggestion:
--Have a "spendless" day one day a week. Do not spend even one cent.
--Have a "credit card" free day 7 days a month. Do not use your credit card 7 days out of 30.
--Eat out only once a month. That means breakfast, lunch, and dinner, only once a month.
2. Pay off credit cards. Pay the one with the highest interest rate first, then go down the line. Do not close your credit cards when paid in full. Put that card away and use it only once every 3-6 months then pay the balance in full at the end of the month. This will help raise your FICO score.
3. Invest in your company's 401K, especially if they do matching funds.
4. Work toward having 8 months of savings liquid, in a money market account, etc.
Don't panic.
Make a plan and stick to it.
Remember, "It's not where you're at, it's where you're headed".

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