Proverbs 22:7 states The rich rule over the poor, and the borrower is servant to the lender.
How is Your Financial Planning Going?
What does proper money management mean to you? Unless you were just awakened from a long coma, you no doubt are very much aware of the global economic meltdown which has affected all global economies in 2008.
Proverbs 22:7 states The rich rule over the poor, and the borrower is servant to the lender. This is a very important bible verse that all of mankind should listen and take heed to regarding finances and debt.
A lot of what has effected the US and the rest of global economies can be attributed in part to very poor money management.
But… also, not having a sound financial plan, and a money management action plan from which to begin anew your wealth building.
Are you aware that according to MSN.com, in 2004, 43% of Americans spent more than they earned each year? Do you also realize that according to cardweb.com, that the average US household carries nearly $11,000.00 in debt and that US personal bankruptcies have doubled since the last decade?
Where is the financial management and sound budgeting? Will you have enough to live on in your retirement years? Have you begun saving for your future retirement planning days, or what you what will you retire to?
The global economic “humpty dumpty” has already fallen and almost every major global economic government is trying to develop a lasting financial plan and sound budgeting skills that will work. Although there now appears to be growing signs of a global economic turnaround-the US and global economies are far from stating complete victory until home values rebound, the mortgage foreclosure crisis stabilizes, banks loosen up credit lending, and the employment market stabilizes and actually begins to create jobs again instead of cutting and slashing.
10 Steps You Can Do NOW In Preserving Your Hard Earned Money…
There are specific steps that you can do now, in developing a sound financial plan. All is not complete gloom and doom in your money management, building wealth plan, as you develop budgeting and implement financial management action steps in your personal budgeting, but you need to take the necessary action steps now.
1)Some debt is actually good such as debt for a home mortgage or a college education. The key point here is not to borrow any more than your financial ability to pay on these monthly debts when you develop your financial plan in your budgeting.
2)Make an itemized list of all your money management expenses and your income per month. Only by knowing the exact amount what you are spending each and every month, are you then able to develop sound financial skills that you can you use for yourself and your families, financial management, in the hopes of building true and lasting wealth for yourself.
3)Learn to differentiate your financial management expenses between “wants” and “needs” in your financial plan for building wealth. This may seem obvious but many people spend indiscriminately, regardless of the cost of the item without a sound financial plan for budgeting their expenses.
Before making any big purchase that is more of a “want” then a “need”, you should write down the item you want to purchase on a note card and place the note card somewhere you will see it every day. Remember building wealth requires commitment, and self discipline on your part, in developing your financial plan. Sound money management principles are required not only for budgeting but for creating and building wealth that will last.
You should make it a habit to wait until at least thirty (30) days before purchasing the item in question. Usually within the 30 day period your interest in the item may have substantially diminished, thereby saving you considerable money in your budgeting and financial plan.
4)The key to building wealth is to pay off all your higher credit card balances that charge you the most interest per month, while paying at least the minimum amount on your lower interest rate loans. Tackle all your higher interest rate loans first then work down on your smaller balances after you have paid off the larger balance interest bearing loans.
5)Never fall into the trap of paying just the “minimum” balance of your credit card loan balances when budgeting your monthly expenses-this is poor financial management planning. If you defer to paying just the minimum monthly amount in your financial plan, you’ll be barely covering any principle at all on the loan, and you will just increase the overall dollar amount you will have to pay on the debt over time, which is poor budgeting.
6)Be careful how and where you borrow-borrowing against your retirement accounts such as your employer, sponsored 401K or your IRA retirement account is never a wise decision nor is it ever recommended when developing your financial plan when budgeting your expenses.
You will never be able to recover the full “investment cost” losses, from taking an early withdraw on your retirement savings when those monies would/could still be earning you a nice return based upon the previous balance. Many people borrow against their home’s equity for emergencies such as major repair expenses. If you must borrow against your home, shop around for the best equity loan and pay the loan off as quickly as possible.
7)You should plan to save at a minimum-six (6) months emergency living expenses in your money management plan should the uneventful happen due to death and dying of a loved one, sudden illness, sudden loss of a job, or unforeseen medical emergency.
Saving at least a six month reserve fund or safety net will provide the financial management cushion you will need to “weather” this short term financial emergency without having you to go further in debt to cover these living expenses in your money management plan.
8)Don’t be too quick in paying off your mortgage if you have other higher interesting bearing loans. You should focus your immediate attention in paying off all your higher interesting loans first, then you can put down additional principle on the balance of your mortgages.
9)Don’t wait until the last minute in seeking financial help. There are many reputable financial debt counseling agencies both on-line and off-line that can assist you in your money management plan. You must however due your good due diligence in identifying a reputable agency and a debt reduction program that has your best financial interests at stake.
10) When you pay off a credit card balance, you should make an attempt to shred the credit card so you are not attempted to use the credit card ever again.
Never carry more than two (2) credit cards at any time, and always pay more than the monthly minimum in helping you to pay down the loan.
Keeping these 10 key points in your budgeting will help you in building wealth which will last.
You just need a positive attitude, and the self motivation in keeping to your plan.
Remember: ”The only Unfulfilled Goals in Your Life are the Ones you Never Attempt”