Money Tips

Personal Financial Planning
Budgeting
Saving
Building Your Credit

Personal Financial Planning
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A key component of personal finance is financial planning. Because your financial situation is constantly changing, you will need to continually monitor and reevaluate your financial plan regularly.  Start with these basics, and adapt them to fit your needs and lifestyle.

1. Assessment: Begin with a personal balance sheet that lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). You will also want to build a personal income statement lists all personal income and current expenses.
2. Setting goals: It is not uncommon to have several goals, some short term and some long term. Typical goals include: paying off a credit card debt and or student loan debt, building a retirement fund, creating a college fund for children, pay off medical expenses, and estate planning. Setting financial goals early will help direct your financial planning.
3. Build a plan: The financial plan details how to accomplish your goals. It could include, for example, reducing unnecessary expenses, increasing one's employment income, or investing in the stock market.
4. Execution: Execution of one's personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.
5. Monitoring and reassessment: As time passes, one's personal financial plan must be monitored for possible adjustments or reassessments.

Budgeting
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One of the most helpful tools for your financial planning is a personal budget. This is the best way to make sure that you are saving more and spending less. You may feel overwhelmed at first, but if you take one step at a time, it is easier than you think.

1. Don’t wait. Start now. Organize last month’s bills and income by due date to see where you stand.
2. Create a budget calendar for each month. List your income and expenses by the date received or due. Remember to factor in seasonal spending such as holidays and birthdays.
3. Break expenses down into two separate categories: fixed payments (car payments, mortgage, rent, etc.), and variable payments (utilities, grocery bills, gas, etc.). Estimate your variable expenses using previous month’s bills. When in doubt, add $5 to each variable expense to help cover any errors in your estimates. Double check to make sure to include all of your expenses (even the ones you think are insignificant – i.e. specialty coffee).
4. Review your expenses to see where your income is going. Are there any expenses that you could reduce or even eliminate? Are you spending more for something than you thought (cable bill, eating out, etc.)? You may be surprised how the little things add up. For example: Specialty coffee 3 days a week = $35/month. If you brew specialty coffee at home = $10/month.
5. During the middle of each month, take a quick look at your budget. Check to see if you are within your budget, overspending, or you forgot an expense all together. Readjust if necessary.
6. At the end of each month check your budget and make any adjustments for the following month. Did you stick to your budget? What, if anything, do you need to do different this month? Your expenses and income often change, so be prepared to continually adjust and tweak your budget.
7. If you follow this method for a few months, your estimates will be closer to actual. The more you keep track of where you spend your money, the more conscience you will become of unnecessary expenses. Often times, these unnecessary expenses are keeping you from reaching you financial goals. 

Saving
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Here are six simple and sure-fire ways to save more and watch your bank account grow.

1. Prepare: Record your income by listing everything you expect to earn in the coming fiscal year. Remember to include not only salary, but bonuses, raises or tax refunds.
2. Compile Expenses: Try to gauge as best as you can all your monthly household costs. Don’t forget to include hobbies, entertainment and eating out. Even small expenses can add up over the year.
3. Save First: Put aside a certain amount of your paycheck each month into a savings account. Saving even a small amount each month will turn saving into a habit and can accumulate over time. Banks often have tools that will automatically transfer funds from your main account to a savings account. This will save you from trying to remember each month.
4. One Size Does Not Fit All: Understand that your budget and expenses are going to fluctuate. If you have trouble getting a handle on your changing monthly budget, consider relying on a nonprofit financial counseling service to help you with adjustments.
5. No More Debt: For a lot of people, past debts make up the majority of their monthly expenses. The key to saving more is making that debt dwindle, not increase. You can again work with a credit counseling service to help you find ways to work your debt into a manageable amount.
6. Watch the Results: Examine your budget regularly to see where you are improving and where you could cut back more. It is important to stay focused on your long-term goals, but to always adjust and improve upon short-term actions as well.

Building Credit
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A poor credit score not only prevents you from borrowing money or qualifying for low interest rates, but it could also affect your financial situation far into the future. The good news is that bad credit can be reversed with a few changes to your lifestyle.
Here are a few credit repair tips:

1. Cut the Credit Cards: One of the easiest ways to ruin your credit score and keep you in a cycle of debt is overusing credit cards. If you are stuck with credit card debt, put the cards away and focus on paying off more of your balance each month. Not only will you have less debt, but you will be saving hundreds of dollars on high interest rates.
2. Know your Score: Before you can start improving your status, you need to assess the damage. Obtain a free copy of your credit report to find out where you stand.
3. Make Corrections: While reviewing your credit report, you may find mistaken information or charges that should not be credited to you. Contact the applicable credit bureaus to have these mistakes erased from your report.
4. Past Due Debts: When computing your credit score, your payment history counts for as much as 35%. By coming up-to-date on past due debts, you can significantly improve your score.
5. Stop the Cycle: While you are trying to repair your credit, do not apply for additional loans or credit cards. Once you reach your desired credit status, you can once again apply for a reasonable amount of credit cards or loans if necessary.
6. Keep Accounts Open: It is tempting to cancel credit card accounts that have become delinquent. However, cancelling those cards may actually hurt your credit more than leaving them open until you can pay them off in full.
7. Face the Creditors: If you are in serious debt, the last person you want to talk to is another creditor. However, simply talking to creditors about your situation can often help. Many times they will offer lower monthly payments or decreased interest rates to help you get current on your overdue debt.
8. Pay it Off: The only sure-fire way to improve your situation is to pay off old debts. Try paying a little more each month to credit card or loan debts. If necessary, consider selling excess jewelry or electronics for cash in order to get ahead.
9. Ask for Help: There are numerous credit counseling services and other resources dedicated to helping you get out of debt. Many of these groups can offer you sound advice or services that can improve you financial situation for little or no cost.
10. Be Patient: It will take a while to improve your financial standing, but do not get discouraged. Continue sticking to your plan and eventually you will see amazing improvements in your credit score.