BE WISE WITH YOUR MONEY

INSTRUCTION

 

Things You'll Need:

• determination

1. Step 1
   Foreclosures aren't happening just because home prices have gone down. They're happening because people aren't saving, they have too much debt, and they don't have a back-up plan for when something goes wrong. You should know by now that eventually, something will go wrong. So plan for it.
   
   Plan for retirement starting NOW. Did you know that if you made a one-time investment of $2,000 in a mutual fund (a good mutual fund averages 12% a year according to Dave Ramsey*) at age 16, you would have about $516,000 by the time you retire at age 65? Don't we all wish we'd done that? In contrast, if you wait until you turn 50, when many people start thinking about retirement, and you put in your $2,000, it would only be about $11,000 by age 65. That's the amazing power of compound interest! This illustrates the importance of starting to save early. (By the way, in my opinion, the stock market is on sale right now. I think it's a good time to invest). If you think you don't make enough money to be able to save, then you need to take a look at what you are choosing to afford:
   
2. Step 2
   
   
    
   Your Home. Could you live in a smaller apartment or house? If you're single, could you get a roommate or two? Do you feel like you need a lot of space to store all of your stuff? Get rid of it! If you haven't used it in six months, you probably don't need it, but maybe someone else does. Try selling some of it. Once you move into a smaller house, whenever you think about buying something, you will have to decide if it will fit into your house or if you have to get rid of something else to make room for it. I learned this principle when I moved into a 936 square foot house with my husband. We don't plan to always live in this home. We'll move up in house someday, and we'll be able to do that because we've worked hard paying down this one.
   
3. Step 3
   
   
    
   Your Eating Habits. I hope you realize how expensive eating out versus eating at home is. Have you ever added up what you're spending each month eating out in restaurants or in the office cafeteria? Writing down what you spend in any area is helpful. Knowing where your money goes can motivate you to get your priorities straight. Instead of eating fast food every day, bring your lunch. An easy way to do this is to make extra food for dinner the night before and have the leftovers for lunch. Not only is it economical, it's healthy too.
   
4. Step 4
   
   
    
   Your Car. I don't care what my car looks like as long it gets me there. I realize many people aren't like that. Having a nice, new car is important to many of us, but is it because you don't like driving an old car or because you want other people to be impressed with your shiny car? It's easy for me to drive an old paid-for car and not pine for a new one when there's nothing wrong with mine, after all, it is only transportation. Cars last much longer and are much more reliable than they used to be. I should know, my 16 year old Saturn works great!
   
5. Step 5
   
   
    
   Your Entertainment. TV, radio, internet, phones and movies. I'm getting down to the smaller budget items now, but if you can avoid spending $50 here and $20 there it really can make a difference in your budget. I don't watch much TV, so it's hard for me to imagine paying for cable or satellite each month, when we get all the channels we need for free. If TV is important to you, then it is my personal opinion that need to go outside more, read more, and get a hobby. Some people "just have to" watch their favorite teams play, but wouldn't you get more out of going outside and playing your sport with your kids, neighbors or friends? Then again, I never was a sports fan, and I'm willing to admit that just maybe there's something about it I don't understand.
   
   The same goes for radio. I can't see paying for radio when you can get it for free.
   
   The internet. I would probably be a lot more productive if I didn't have the internet here to waste my time. Of course it's good for a lot of things too. On the other hand, if everyone in your household that needs the internet is working in an environment where they have access, and their boss doesn't mind them checking their email, bank balance, etc., then maybe you don't need to be paying for internet at home. For myself, I'm not at work every day and I'm not ready to give it up.
   
   If everyone in your household has cell phones, then consider dumping your home phone. C'mon, everybody's doin' it.
   
   Rather than renting movies, try checking them out at the library.