Don't Let Your Budget Get Out Of Control!

Most financial planners agree that the most important step you can take to strengthen your finances, is to pay down your credit card debt. There is a simple and logical reason for this. If the average interest on a consumer's credit card debt is fifteen percent, he would need to find an investment paying a guaranteed rate equal to that, in order to justify not paying that credit card off.

If you are young, ignore the conventional wisdom of investing in 80 percent stocks and 20 percent bonds, and instead aim for a 50-50 balance. Given the volatility of the market, you can still lose quite a bit by putting most of your money in stocks. Having a mix of both may reduce your returns a little bit, but it might also cushion you against huge losses.

Don't let "ghost power" run up your electricity bill. Many electronics consume electrical power when off, but plugged in, for no discernible reason. By unplugging these electronic devices when they are not in use, you can save a little bit (between 1% and 2%) on your electric bill.

Be sure to satisfy the credit counseling requirement for both Chapter 7 and Chapter 13 bankruptcy. The bankruptcy reform law that was passed in 2005 requires that anyone who enters bankruptcy must complete an accredited credit counseling course before the bankruptcy can be discharged. Don't get taken by sharks. Many non-profit Consumer Credit Counseling Services (CCCS) branches offer low-cost courses that meet the requirements.

Every time, you think about paying with credit or taking out a loan, take the time to calculate what you will ultimately pay for that convenience in the long run. Credit cards typically have interest rates of around 20% while some quick, secured loans can have interest rates that will ultimately cost you two to three times the amount you are getting in the first place. It is far better to go without in the short-term than to cripple yourself financially in the long-term.

Clear debts as soon as you can. Many debts are collecting interest as time goes on, and the interest rates can be very high. Getting rid of debts sooner allows you to pay less on interest and therefore, less overall. Save money by getting rid of debt, starting with the debt that has the highest interest rate.

One way to curb your spending on clothing and accessories is to simply avoid visiting these stores. It may sound obvious, but it is incredibly effective. Rather than spending your time and money at department stores, look for other diversions that cost little to nothing, like checking out books from the library or taking a walk.

Think about the way you drive your car. Do you need to go out 5 times today to run errands, or can you do them in one trip? Do you need to drive to get groceries or can you get them delivered? Changing your driving habits can help you save money on gas.

As you can see, personal finances is all about your management skills. Choose which tips are adapted to your situation, and look for ways to apply them. Take some time to figure out what to do with your money, and ask help from a professional if you think it is necessary.

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