One of the most helpful actions you can take to decrease your spending is to track it for at least a month. For one solid month, write down every purchase you make—down to the cent. When I say every purchase, I mean every purchase. You’ll need to track every night out, every coffee, every taxicab ride, etc. Once you’ve tracked your spending for a month you’ll really be able to see where your money is going, and where you can cut back.
Going hand in hand with tracking your spending is creating a budget. By creating a budget you’re helping to ensure that you won’t fall victim to overspending. To create a budget, you’re going to need two numbers: First you need to know how much you’re bringing in monthly. This should include your take-home pay and any other source of income you may have. Do you have an income that fluctuates from month to month? If so, find an average for the last year. Second, you’ll need the amount you came up with when you tracked your spending for a month.
Once you have these two numbers, you’re ready to budget. Here’s what the breakdown of your spending should look like:
Are some of your expenses costing you more than the appropriate percentage? If so, you’re going to need to do some tweaking. While many expenses are fixed (your mortgage, your car payment etc.) you can likely cut back on expenses that fall under the “other living expenses” category. Take a look back through your notes from the month when you tracked your spending to come up with a budget that keeps you financially stable.
In these tough economic times and at a time when banks are not lending as freely as they have in the past. Good credit needs to be a priority. Look at your credit report regularly, question mistakes or unknown information.
You are entitled to a free credit report one time a year. This is the only free report. www.annualcreditreport.com or call 1-877-322-8228 You will not get your credit score but you will be able to see what is on your credit report and see any outstanding debts that you may have. For your credit score there is an additional charge. You can go to www.fico.com for your credit score.
Valuable Tips: ALWAYS
On credit cards: Note how many credit cards you have, any annual fees, what interest rate you are paying and any outstanding balances.
If you have a problem with your credit and need help, go to a non-profit agency. These are the only legitimate agencies that can help.
Your credit report is your report card of how you pay your bills if your bills are paid late everyone will know. Remember with a high credit score you will be able to get a loan at a lower rate. Also note if you are ever denied credit you can request a copy of your credit report from the company who declined you, free of charge. Credit is the most important indicator of your character that needs to be maintained. Your credit shows that you pay your bills.