I often wonder why people know so much about some
things and little to nothing about others. Some people know every word of the
latest music hit by the mega stars or can tell you which designer handbags are
in vogue. We take time to talk about what Rhianna wore on her latest red carpet
stroll or what's happening on "Scandal". We weigh in
on Beyoncé’s baby's hair or Kim Kardashian's baby’s pierced ears. Somehow these
type things catch our attention and we spend time reading about them,
discussing them, and giving them thought.
My question to you is "how much time do you
spend understanding your financial issues, i.e. developing a family budget,
calculating your net worth, or planning for your financial future"?
Maybe learning the words to songs is easy or
engaging in chatter on Facebook is more fun. Be assured however, that
regurgitating song lyrics and peddling chatter won't matter in
securing a higher quality of life for yourself and your family, now and in
your future. It may be less painful to forget about your finances. Just pay the
bills as they come in and charge what you want to stay in style and keep up
with your friends and co-workers. You’ll find out that this mindset is a recipe
for disaster.
Avoid disaster. Devote some time to your
financial issues. Develop a budget. Read and research materials that will
enhance your understanding of your finances. Take a break from your regular
television programs and slip on the Suze Orman Show on CNBC or listen to her podcasts. Check
out CNN Money.com and read the variety of article on financial topics. Use the
internet to build your expertise in subjects such as how to plan for
retirement, how to develop a household budget, how to find your credit score
and how to improve it, or how to handle credit wisely, etc. You’ll be able to make better more informed
decisions on handling financial matters. Hopefully you’ll appreciate the time
as personally beneficial and time well spent. It's not rocket science.
Once you begin learning about your finances, you’ll
see how much easier planning and decisions making becomes. You’ll see that making
a budget is basic and the core to your financial plans. It’s simply what you
have coming in, i.e. your payroll earnings, child support, rental income, etc.
minus what you have going out, i.e. rent, phone, cable, car note, car insurance,
medical bills, credit card payments, etc. Naturally, you pay outs cannot exceed
your income.
When you have money left over after deducting your bills
from your income, you have “discretionary” income that you can save or spend as
you will. You’ll want to save for emergencies and be sure to work toward
putting aside enough to cover a minimum of one month’s worth of expenses. After you’ve saved
one month of expenses, work on saving a second month, and then a third month.
Financial experts advise you to build an eight month emergency fund to give you
a hedge for layoffs, job changes, and any income disruptions i.e. garnishments,
banking errors, and the like.
Most people live from paycheck to paycheck and that
will never change until you bite the bullet and develop a plan to change that
situation. Making a change requires action. Maybe you need a second job and/or
to reduce your debt in order to begin to accumulate savings. Do you have the
courage to put away your credit cards and not allow yourself to charge
anything? Cutting them up is one sure way to stop using them and will force you
to live within your means. Quit eating out and eat at home. Stop paying the
minimum amount due on your credit cards. You’ll save on the interest charged
and reduce your debt more rapidly. Without debt, you can increase your savings.
I hope that these things spur you into action and
improve your financial health. Remember, every new journey starts with a single
step. Make that first step.
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