Building Financial Fitness

Helping women balance family and personal funds.

When it comes to finance, knowledge is power. The more you know, the better the spending, savings and investing decisions you can make to ensure a secure future.

Living within your means is essential for you and your family’s financial well-being. This means diligently monitoring expenses and planning for the unexpected.

Whether it’s credit card debt or an unaffordable mortgage, unmanageable debt is the root cause of most people’s financial pitfalls.

Whatever you do, don’t be in the dark. Be an active participant in managing your family’s finances. You need to be aware of your family’s total income, understand your monthly living expenses and know when all of your bills are due. Keep a record of the vendors’ account numbers and contact information.

The Basics

  • Continually check your credit report. If you are married, large purchases like your home and your car were likely purchased in both your name and your spouse’s. You need to know how much, if any, debt you might be responsible for. Use different bureaus to take advantage of the free report offering as well as to confirm there are no reporting mistakes. Understanding your credit report enables you to make intelligent money management choices.
  • Actively monitor your household budget. A budget isn’t something you create at the beginning of each year. You need to be actively engaged in adjusting and monitoring your budget each month. The costs of basic living expenses fluctuate throughout the year. With hikes in gas and food costs, you must monitor your spending habits and budget to accommodate these changes. Keep a spending journal by writing down everything you pay for. This way you know where your money has gone. Make adjustments at the end of each month to cut out meaningless spending.

Simple Tools to Manage Your Money & Save

  • Make automatic payments. To prevent missed payments, the resulting late fees and negative marks on your creditor score, enroll in automatic payment programs for all of your bills. Just remember to check your statements each month to confirm you have incurred the appropriate charges.
  • Be social. Utilize social networks like Twitter and Facebook to learn how to better manage your money and save. It costs nothing to sign up and receive tips from financial experts. Here you can search for stores where you like to shop and become a fan or follower to receive updates on sales and promotions. Also look for coupons and frugal shopper sites for opportunities to save money.
  • Get a library card. A library card is your ticket to many financial tools, such as free books, resources on the Internet, DVDs and seminars. Take advantage of the great money management, budgeting and educational investing materials available.

Dealing with Debt

  • Slash your spending. Spending less increases your disposable income, and you must use your disposable income to take care of your debts, especially credit card debt. Find at least one area of your budget to significantly reduce your spending. If you have a mobile and a home phone, drop one of your services for a savings of approximately $900 per year. Try to limit your spending on food to around $100-$125 per week for a family of four by purchasing store-brand items, using coupons and skipping prepared foods as well as junk food.
  • Pay down your debt. Start with the credit card that has the highest interest rate and pay that one off first. Then take that monthly amount and add it to the payments you’re making on your other credit cards. You’ll pay them off quicker and spend less on interest, which means more money in your pocket.

Start Saving

Don’t depend on anyone else to take care of your future. Hopefully you are already in the habit of saving money. You’ll want to set aside funds for both your long-term and short-term security.

  • Make saving seamless. If possible, have an amount deducted from your paycheck and deposited into a separate savings account each month. If you’re afraid temptation will get the best of you and you’ll raid the account, open a savings account at a different bank than the one where you keep your checking account to make accessing the funds less convenient.
  • Realize consistency is key. Try to increase your long-term savings by 1 percent each year. At the beginning of each new year, up your contributions to your retirement account by a small increment. It won’t seem like a big dent in your take-home income and it pays off in the long run.
  • Don’t become overwhelmed. A lot of Americans hear that they should have at least three months worth of living expenses in their savings account. When you are living paycheck to paycheck, that number seems unattainable. Start small. Even $5 a day ($35 a week) leaves you with more than $1,800 in savings within a year.