Personal Finance Basics

The first step towards taking control of your financial future is to understand the basics.

The first concept is to understand that you need to become your own accountant.

• Account for the money coming in

• Account for the monthly expenses

  * I like to create a spread sheet with expenses listed. I.E. Phone bill, Car Payment, Etc. Once you understand how much you spend, do the same thing for your income. List all of the money coming in so that you can balance spending for food and entertainment along with any other categories you create.

If you can set aside 10% of your income to a saving plan you are ahead of the game.

The next concept is understanding debt and how to use it to your advantage.

• Credit card interest will eat away at your financial success if left unchecked.

• Interest gained in a saving account is trumped by credit card interest.

  * Pay each revolving credit account statement balance before interest is charged, even if that requires you to use your savings to do so.

Paying your statement balance off will allow you to avoid these steep credit card interest rates. Statement balances usually close on the 5th through the 10th of the month. If on the close of the statement period you owe $500, you must pay that $500 back before the end of the statement period. The key is you don't need to pay your card to zero by the statement close date. Only what was owed from your previous month statement.

++Any questions, contact me and ask.

A third concept is to take steps to learn everyday. Go online and ask questions. Read articles from your favorite financial news site. Yahoo Finance, or CNBC are two but there are so many more. Investing for beginners podcast is also a great investment of your time. You can go through and pick episodes on topics that you are interested about. Continue to learn and grow.

• Set attainable goals.

• Set goals that will be harder to achieve.

  * Setting goals that you can achieve will help build confidence, and will empower you to continue to grow.

Just remember that you can do anything you put your mind to. You have to commit to the things that you start. You have to put your best foot forward everyday.