Change Your Financial Picture

by: Pamela Petrich

No matter what your financial situation is at this moment of time there are strategies that can help you plan for your fiscal future. If you are in debt there is hope for recovery. It has been said time and again, that planning and saving for a rainy day is a good place to start. No matter how much or little you can afford to save ­ the time to start a savings plan is now. Ideally it has been suggested that if you are working that you invest 10-12% of your income in a savings plan.

It may be painful at first to put this money away into a long-term CD, or IRA, or Roth IRA, mutual funds or 401k, but it is possible. First though you must change your old patterns of thought. In order not to miss this 10-12% of income you will need to evaluate your current spending habits. If you are spending money on unnecessary items or impulse purchases, you will need to forgo this line of thinking. Oftentimes we buy things because we think we need them. We buy things on impulse when we are sad, depressed, bored, or think we need to impress our friends, neighbors, or colleagues.

The next time you are tempted to buy something on impulse walk away. Give yourself 48 hours to think about it, if you find you still need it, than your decision may not be based on impulse alone. If we would all just live within our means than we would probably not be in debt. Having said this, I realize the temptation to spend money is based on our individual cultural and family upbringing. There is a difference though between spending money frivolously and when there is actually a need to do so.

If you are in credit card debt now is the time to consider consolidating your high-interest rate cards. You can consolidate these cards a few different ways. If you are a homeowner you may consider re-financing your home and taking out a line of credit or home equity line. This may give you the extra money you need to consolidate your debt and pay off those credit cards once and for all.

Naturally if you choose this route speak to a good financial advisor or trusted mortgage banker to ensure that you are getting the best rate of return on your refinance. The next step would be to try to eliminate some of the credit cards you own if you have multiple ones. You may decide to keep one credit card for emergency purchases only. I stress emergency only! Otherwise, you will quickly find that your debt has escalated and now you are unable to pay off your new loan; this could force you to lose your home.

Don't let this happen, instead make the mental switch to live and spend less money than you earn by cutting costs. If you have insurance, make a decision to shop around for lower rates and if possible discuss raising your deductibles. This move may save you several hundred dollars a year in premiums.

If you don't own a home or can't refinance at this time, don't despair. Look at your credit card bills and choose the one with the highest interest rate. If possible pay more than the minimum on this card, and plan accordingly to do so with the others as you can. If you cannot pay more than the minimum it is still important to pay your credit card bills on time. This keeps your credit scores/rating in good standard, which will eventually give you the power to negotiate. You might consider speaking to a financial advisor or banker for free advice on how to manage your debt. They most likely will ask you to create a budget and stick to it, once again proving that if we can just live within our means Whatever your situation, do not give up hope or continue down the destructive path of financial distress. Ask for help. There is always someone who has been there before and you will be reminded that you are not alone.

Another good way to save money, if you smoke, quit. Ok, I know this is not an easy choice to make. In fact because smoking is so addictive you may need a lot of help, but if you can quit not only will you save money ­ you will be saving your life as well.

Consider when you are shopping to try to buy non-brand items and request generic prescriptions from your doctor. Prepare a list of essential items you need each time you go shopping and don't deviate from your list. Your wallet will thank you later when you actually need the money for an unexpected emergency.

Last but not least, if you are able to increase your salary by getting a better or high-paying position or could do so if you added additional skills, than this of course would give you a boost of financial confidence. There are still ways to do this. Consider taking a class at a community college or business technical school. There are also opportunities for job retraining through your local unemployment office and free computer classes are offered at some public libraries. These thoughts are all to help motivate you to begin to change your financial picture. It is by no means a thorough investigation into how you can do this, but it is a beginning. As only the famous bard, William Shakespeare said, "Nothing comes from doing nothing." Start now on strengthening your financial picture!