Did you know that 76% of Americans are living from paycheck to paycheck according to 2013 research done by Bankrate.com? Here are seven steps to break that cycle in your household:
1. Establish and follow a budget.
Your budget is your spending plan for your money. Without a plan you are bound to work outside of the boundaries of your income. It is important to establish and then follow a budget on a monthly basis.
2. Educate yourself financially.
An educated choice is always the best choice to make. Educating yourself financially means to begin reading books, articles and blogs that are related to finance, especially personal finance. It also a good idea to listen to some podcasts and television shows that relate to the subject area.
3. Clean up your credit.
There may be some things on your credit report that is causing your score to be lower than it should. These are the items that need to be straightened out. Your credit report should also be checked for accuracy – late payments, credit balances, etc. Have your report review and make it a priority for the first quarter of 2016 to “fix” your reports and scores.
4. Establish and Continuously Fund Five Funds.
There are at least five funds that everyone should establish:
Ø G.O.O.D. (Get Out Of Debt) Fund
Ø Vacation Fund
Ø Retirement Fund (outside of your employer sponsored fund)
Ø Investment Fund
Ø Replacement Savings Fund
5. Investment Plan.
Create an investment plan. Simply saving money is outdated and no longer works effectively in this economy. Therefore your ability save money has to be mixed with a good investment plan in order to generate wealth. Be sure to read my free e-book entitled, Income Producing Assets, which can be found at www.fredericktowles.com.
6. Put your blindfold on.
Forget about the Jones’ unless they are related to you! Don’t look at what anyone else acquires. This is the largest cause for debt – living like the Jones’. Therefore set your plan, stick to your plan and put your blind fold on, enjoy the ride.
7. Get a professional finance coach.
There are several benefits of working with a professional finance coach: your coach offers a fresh perspective on your financial challenges, enhanced decision-making skills, increased confidence and a depth of financial expertise. For more information on working with a finance coach please visit: http://unlimitedexp.com/services/.