Home Budgeting and Financial Success

Reach for Financial Success

It is always a good time to think about finances and create a budget for this year that will bring you the financial success that we all desire. We often make a commitment to improve our personal situation, but procrastinate. There is not time like the present to make a home budget if you don't have one, so you will know exactly where your money is being spent. It will also show you places where you may be able to cut back and put more money into savings. Below are twelve steps that will bring help you reach your goals.

Credit Reporting Agencies

First review you credit report from all three credit reporting agencies. There is no cost for the credit report and the reason you want all three is these companies are for profit and in competition with each other, so the information may be different on each report. You can get one for free annually from:

  • Equifax P. O. Box 740241, Atlanta, GA 30374, 1-800-685-1111,
  • Experian P. O. Box 2002, Allen, TX 75013, 1-888-397-3742
  • Transunion P. O. Box 1000, Chester, PA 19022, 1-800-888-4213

I included the addresses in case you have something on the report that is incorrect, in which case you will need to write to the company with you’re a copy of your proof. It is also wise to obtain your credit score which will cost you a small fee, however, your credit score is a major dictator of whether or not a lender will extend credit, and at what interest rate. If your score is low, take the necessary steps to try to increase the score by buying down your debt and you may have too many credit cards.

First 6 Steps of Success

Secondly, reducing your debt is an important consideration in many cases. If you are piling new debt upon old debt that is a red flag to lenders that you are living above your means. You must stop all impulse buying. If you need help reach out to a financial coach such as the National Foundation of Credit Counseling or Family Foundations.

Number three is save 10% of your net income in a savings account each pay day. Find extra money to put in savings with bonuses, raises, money from a garage sale and any other money that is not part of your normal income.

The fourth important thing is to get financially organized. It is important to have a place to keep you family’s financial records where you can find all your records. It can be a file drawer with a couple of files, an accordion folder or even a couple of large envelopes. Put your mortgage, wills and original documents in a safety deposit box.

Number five is to absolutely avoid late fees or overdraft fees. Pay your bills promptly. It is very helpful to keep your finances in a computer program such a Quicken or Money. There area also free programs online and you can use Excel. Be sure you write down all ATM cash withdrawals or debit purchases. Online banking for paying bills can also be helpful for those who are comfortable using the computer. Plus, you can check your bank account online periodically to make sure there isn’t anything you have accounted for all your expenditures.

The sixth thing that is helpful is to track your spending for 30 days. This works just as well as writing everything you eat for several days when you are going on a diet. Write down every penny that is spent. Quite often it is the small items that cause our problems and we don’t realize how they add up. At the end of the month sit down with your partner to review the spending as this is the best way to truly know where your money is being spent.

Steps 7 through 12

Next create a practical spending plan. ` Make conscious decisions on just how you want to spend your money. It has to be a plan that will work for you and your family. It can’t be too strict or no one will stay on it and if it is too lenient you might not meet your financial goals.

The eighth step you should take is to take advantage of free money. Contribute the maximum amount to your retirement plan at work or at the least match the employer’s contribution. Flexible spending accounts or Health Savings Accounts can help lower your taxable income.

Another way you might save money is to have an “insurance check-up” annually. This means you meet with the insurance provider and confirm your coverage and inquire about ways you can save money. Maybe your auto insurance can be lower if you have a good driving record and you might want to bundle all your policies with one provider to get a multiple policy discount. You can also save money by increasing your deductible.

The tenth thing to do is plan to buy a house if you don’t own one. A home of your own will stabilize your payments, hopefully build equity and you have the tax write offs for interest and property taxes.

Next, if you have children, save for college. Too many students graduate from college with student loans that can take many years to repay. There available college savings plans such as 529 plans or prepaid tuition plans which may be perfect for your needs

Number twelve is remembering to budget for fun. It is important to have some fun along the way even while working hard toward reaching financial success. Put a line item in your budget for fun.

10 Steps to Financial Success

Summary

If you even put one of these twelve steps in place each month by next year at this time you will see a different picture of improved financial success, or if you want to speed things up put one item in place each week. Making these changes will give you financial success over the years and you will never be sorry for making these decisions.

© 2011 Pamela Oglesby

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Comments 22 comments

WillStarr profile image

WillStarr 5 years ago from Phoenix, Arizona

Great advice, and timely. Pay off those Christmas debts ASAP.


onceuponatime66 profile image

onceuponatime66 5 years ago from USA IL

Great advice and well written. I am not in debt at all so I must of done something right. Thanks for this have a great day Keep writing


Pamela99 profile image

Pamela99 5 years ago from United States Author

WillStarr, I agree. Thanks for your comment.

onceuponatime, I'd say you are. I'm not either but it wasn't always that way. It feels good though. Thanks for your comment.


Simone Smith profile image

Simone Smith 5 years ago from San Francisco

What great steps! This guide makes the financial planning process seem quite reasonable. Thanks for making it - I'll definitely be budgeting for fun, too!


Pamela99 profile image

Pamela99 5 years ago from United States Author

Simone, I am glad you enjoyed the process and yes fun is important too. Thanks for your comments.


Glemoh101 profile image

Glemoh101 5 years ago

Thanks for your helpful hub, i rated it.


Pamela99 profile image

Pamela99 5 years ago from United States Author

Glemoh, I appreciate your comment.


K9keystrokes profile image

K9keystrokes 5 years ago from Northern, California

Great stuff Pam! Way up and awesome.

K9


Darlene Sabella profile image

Darlene Sabella 5 years ago from Hello, my name is Toast and Jam, I live in the forest with my dog named Sam ...

Exellent hub, and of course I rate up. I think this is hard to do and hard to understand. I have saved and invested only to pull it due to emergencies. I have beenn so poor and so rich in my life, I think I would love to stay in the middle. Great job, and congrats on your win my darlin friend. Love & peace darski


rpalulis profile image

rpalulis 5 years ago from NY

I find it much harder for some reason to follow a budget know that I am self employed v. when I made much more money as a traveling sales professional. I am determined this year to get back on a budget and start being a better steward of my finances. Thanks Pamella


CYBERSUPE profile image

CYBERSUPE 5 years ago from MALVERN, PENNSYLVANIA, U.S.A.

Pamela, very Interesting and Informative Hub. I just love "Money Grows on Hubs" I am waiting for this to happen and am aware that it takes time.

God Bless !


Pamela99 profile image

Pamela99 5 years ago from United States Author

K9keystrokes, Thanks so much for your comments.

Darsky, Yes, being in the middle isn't so bad when you compare it to the way up and way down life. Thanks so much for your comments. Love and peace.

rpalulis, It is hard to have the discipline to stay on a budget when it hasn't been a life long habit. I heard one time that you must do something 30 days in a row for it to become an ingrained behavior. I don't know how that helps you unless it is just posting your budget somewhere that you will see it each day. Thanks for the comments.

Cybersupe, I want to plant a couple of those tress myself. I appreciate the comments.


claptona profile image

claptona 5 years ago from Earth

Good post Pamela,

The one big point I would disagree with you on is buying a home.

The playing field of money and assets has changed, and if the present policies of our government do not change, buying a house will become a ball and chain around your neck. Home prices are going down for a long period of time. A house as an "equity builder" is over for years, if not decades.

Out of debt, a budget, a plan on how to allocate resources are all good.

Just that the "buy a house thingy" is not the same as it used to be.

Again, good post.

Cheers

John


Pamela99 profile image

Pamela99 5 years ago from United States Author

Claptona, I think what you said has been true for the past several years, but if prices are at the bottom and you can buy a home that has been reposed, for instances, maybe it needs some TLC its possible that it will be a good investment over time. I know it seems a bit of a gamble right now but I guess I am the eternal optimist. Thanks so much for all your comments.


okmom23 profile image

okmom23 5 years ago from Midwest, U.S.A.

Pamela-Another great hub! Well written and helpful.


Pamela99 profile image

Pamela99 5 years ago from United States Author

okmom, Thanks you so much for your comment.


Hello, hello, profile image

Hello, hello, 5 years ago from London, UK

A well written,as always, hub and great advice. Finances can get out of hand so quickly


Pamela99 profile image

Pamela99 5 years ago from United States Author

Hello, They sure can. All it takes sometimes is little crisis such as a major car repair expense. Thanks for your comments.


akirchner profile image

akirchner 5 years ago from Central Oregon

All really great points, Pamela!


Pamela99 profile image

Pamela99 5 years ago from United States Author

Audry, Thanks so much for your comments.


Support Med. profile image

Support Med. 5 years ago from Michigan

Great ideas to save money. Impulse buying is the worse. In these time, a budget plan is definitely needed. vr


Pamela99 profile image

Pamela99 5 years ago from United States Author

Support Med, I fully agree with you and I appreciate your comments.

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