9 Ways To Take Control of Your Finances in 2007
By Michelle Pastor, Accredited Financial Counselor, for Truston
Are you tired of juggling to make ends meet? Resolve to take control of your finances in the new year. These suggestions will help you to make this your year for financial success.
1. Check your credit report. To get your credit report, call 877-322-8228 or visit www.annualcreditreport.com. You can get one free report from each credit reporting agency (Experian, Equifax and Trans Union) once every 12 months. If you see anything suspicious on your credit report, dispute it with the credit reporting agency right away.
It can be cumbersome to remember when to request which credit report and when they should arrive. MyTruston helps by keeping track of your inquiries for you and sending an e-mail reminder when it's time for you to request the next credit report (for free).
2. Make the credit card companies work for you. Ask your credit card companies for a lower interest rate, then list your credit cards in order from the highest interest rate to the lowest. 'Attack' the card with the highest interest rate by paying as much as possible on this card and paying only the minimums on all the rest. Once this card is paid off, cancel the card and 'attack' the card with the next highest interest rate. Keep this up until you've worked your way out of debt.
Please note that the length of time you have had a credit card impacts your credit score—the longer the better. So you need to balance the need to get out of debt with the desire to maintain a higher credit score. A rule of thumb: If you are able to reduce the balance and can pay off the balance each month, and the card is the oldest one you have, then you may want to keep it.
3. Prevent late charges. If your credit card due dates don't work well with the timing of your paycheck or the due dates of your other bills, ask your credit card companies to change the payment dates—most will. Changing the due dates can save you a lot of money and help your credit score at the same time.
4. Wipe out impulse purchases. The temptation to buy things you don't really need is one of the main reasons that finances get out of control. If this is an issue for you, figure out ways to avoid it. For instance, use a list whenever you shop and commit to sticking to it. If you're tempted to buy something that's not on the list, force yourself to wait 48 hours to buy it. Chances are you'll either forget about it or you'll decide that it wasn't really that important after all.
5. Keep track of what you spend. Track expenses for a few weeks to see where your money goes. This will tell you if you're spending more money than you make and where you can cut back.
6. Make a plan. Review your spending and ask yourself if your money is really going towards things you need. For example, "Do we need to go out to dinner twice a week or would we rather go out once a week and put that extra money towards paying off our credit cards?" If the answer is yes, make this a part of your plan.
7. Pay more than the minimums on credit cards. Don't just make the minimum payment each month or the balances will never go down. Put all extra money towards your credit cards, even if it means getting a part-time job to do it, and you'll eventually whittle the balance down.
8. Make it a team effort. It is easier to be motivated when you have help. If a friend of yours is also interested in taking control of his or her finances, do it together. You'll both have a better chance of succeeding because you can share ideas and encourage each other during difficult times.
9. Make yourself accountable. It's important to set up a system of reminders to keep you on track. If you're saving for a new car, put a picture of your dream car in your wallet to remind you of your priorities every time you spend money. Also, let family and friends know that you're taking control of your finances and ask them to give you gentle reminders when they see you getting off track.
© Copyright 2006 Truston and M Pastor. All rights reserved.