Budgeting your money

On this week’s edition of Need to Know we meet Carol Rivera, a woman on a mission to help individuals on the lower end of the financial food chain make better decisions about how they spend their money. Rivera got help from the Family Independence Initiative, which assists “the full spectrum of income families who are taking action to build their own paths toward self-sufficiency.”

But regardless of where you fall on the income distribution scale, most of us could do a better job at managing our resources — especially during these lean economic times. Here are five easy-to-follow tips that will help you gain control of your personal finances.

1. Don’t lose track. Keeping an accurate record of your income and expenses is the first step to budget management. Compile all of your monthly expenses, and prioritize items that are fixed like rent, mortgage and car payments. Then adjust those items that are elastic, like entertaining, so that you’re not spending more than what you’re bringing in. These days, you can create a budget on user-friendly websites like Mint.com, which will also track of all your financial transactions — for free.

2. Don’t splurge, save. The simplest rules are often the hardest ones to follow. Put aside money each week, whenever possible. Your future bank balance will thank you. Plus, a nest egg will help cushion the blow of unforeseen health care costs and unemployment. A corollary to this tip involves revolving credit: avoid interest costs whenever possible.

3. Don’t eat your cash. One easy way to minimize variable costs like food and entertaining is to cook more. Skip restaurants and takeout meals — you’ll be richer and healthier for it. Need some culinary inspiration? Check out blogs that focus on wallet-friendly meals that will help you stay on track.

4. Don’t neglect your health. Exercise, eat well and get regular check-ups. Waiting until a condition degenerates to visit an emergency room can cost you. Health care costs are one of the leading causes of bankruptcy and foreclosure in this country.

The Supreme Court’s historic upholding of the Patient Protection and Affordable Care Act has far-reaching implications for those currently uninsured. Consult this useful primer and state-by-state guide to see how this new legislation will affect you.

5. Don’t bury your head in the sand. Stay abreast of your financial affairs. When in doubt, consult the experts — there’s no shortage of them. Try reading Jean Chatzky and Suze Orman, both of whom have built empires around dispensing personal finance advice.

 

Comments