Tips for Getting a Handle on Your Finances

Just as it would be hard to take a road trip without having a map it’s virtually impossible to be financially healthy without having an idea of where you are now and where you want to go.  CCCS of Hawaii offers these simple suggestions to help you:

• Get organized. Round up all of your bills, grab a calendar and mark the due dates down for each payment, the amount due and keep them together. Check the calendar once a week to make sure you’re on track for the week. When you’re ready to move on to the next month tuck the bills into a manila envelope, label the month and put it in a drawer. For the computer- literate procrastinators out there use the option of online bill paying. Remember- a payment that is only a day or two late can trigger a late payment flag on your credit report that will haunt you for the next seven years!
• Create a Budget. Although the word seems to have a negative connotation for many it is THE most powerful financial tool you will ever master. A budget is simply YOUR spending plan.  It creates awareness so that you may direct your money where it is most important to YOU.  We are often asked “what should my budget be?” There is no one-size-fits-all type of budget- each is unique to the individual or family. While there are some general rules-of thumb dietary/medical requirements, social interests, family activities all influence a family’s financial picture. The important thing is to be aware and plan for these things on a monthly basis.
• Track your spending. If you don’t have a clue how to develop a budget the best place to start is to determine where your money goes now- on a daily basis.  Make the commitment for the next month to take ten minutes at the end of each day and write down every cent you spent- from the latte at Starbucks to filling up at the gas station. Total everything up at the end of the month and you will have a fairly good idea of what you’re spending. It can be a little startling to realize that those coffee breaks are costing you $120/month and that money might be better spent elsewhere.  This simple act helps you find the pukas, re-prioritize spending, change old habits and puts YOU in control of your financial life.
• Find money to save. Now that you have a realistic, and quite possibly, tight budget find a way to save.  Try to direct ten percent of your paycheck to a savings account that is for emergency purposes ONLY.  Unanticipated money like bonus and overtime checks from work should also be directed into savings.  Your goal should be to have at least three times the total of your monthly budget in savings that will help to see you through in case of a sudden or severe change in your job or health.
• Face your debt. If you’ve dug a hole put down the shovel. If debt, most likely credit card debt, is preventing you from reaching your goals STOP using credit cards. Pay cash or use a debit card.
• Know what’s on your credit report. The FTC website is www.annualcreditreport.com. This is the ONLY site where consumers can obtain all major credit bureau personal reports once free each year.  Beware of sites with similar names (they will either charge you or use your personal information)- use this site only!

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