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CONSUMER CREDIT COUNSELING SERVICE OF SACRAMENTO VALLEY
STEP 1: ASSESS where you are financially.
- List all sources and amounts of income.
- Keep a record of expenses to determine where your money is going.
- List all assets and approximate values.
- Identify problem areas and take steps to resolve them.
- Develop a record-keeping system.
- Evaluate company benefits; such as, life, health, disability, savings/retirement plans.
- Check payroll exemptions to ensure proper IRS withholding.
STEP 2: DECIDE where you want to go.
- Distinguish between wants and needs.
- Set realistic financial goals--both short term and long term.
- Prioritize your goals.
- Review and revise them periodically.
STEP 3: FORMULATE a plan for reaching your goals!
- Set spending limits and revise as needed.
- Become an informed consumer--shop wisely, including for credit.
- Plan credit use-- it is not an extension of income.
- Limit total debt (excluding mortgage, which should not exceed 28%) to 15-20% or less of net
income.
- Develop a system for paying bills on time.
- Evaluate insurance needs and adjust as family circumstances change.
- Save for periodic expenses and emergencies to keep your plan on track.
- Develop a medium and long term savings plan for special goals.
- Utilize employer sponsored savings plans if available.
- Remember estate planning: seek professional advice for a will or living trust.
STEP 4: VIEW financial planning as an ongoing process.
- Be realistic in your expectations--developing a workable plan will take time, effort, and revision--experts say it takes 6-9 months for a budget to settle into place.
- Adjust your plan as goals are reached and family circumstances or income change.
- Attain financial freedom by learning to control the money you have rather than letting it control
you--save/invest to earn interest rather than pay it.
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