They say that in life, less is more. A great
compensation/commission program should be able to fit on a business card. An
effective life lesson is “All things in moderation.” A company slogan should be
less than five words. “Just Do It” “Finger Licking Good” and “Save Money, Live
Better” are just a few of the quick and catchy company slogans that come to
The same idea of brevity can be applied to your financial
plan. As we approach the end of the year and look forward to the clean slate of
2019, let’s use that idea of quick and catchy when creating a financial plan
that will help get you on the road to being debt-free.
With the advent of Twitter, we learned that to be effective you had to be able to get your point across with as few words as possible.
The shorter the message is, the easier it is to remember. If it is easy to remember, it is more than likely going to be acted upon. So let’s apply this Twitter rule to your financial plan.
Like the long-running game show Name That Tune, let’s name that financial plan in 12 words!!!
Spend less than you earn, save 10% and
pay bills on time.
It is as simple as that. You can modify the saving
percentage to make the most sense for your family as long as there is some
element of savings as part of your plan. So let’s take a look:
Spend less than you
This seems easy to understand and yet, so many families today are supplementing their take-home pay with credit cards. While you may still be able to be financially solvent by adding credit cards to the mix, unless you are paying off the balances in full each month, you are still living beyond your means.
Credit cards definitely have a purpose and can be a great way to manage your money, but if you are not able to pay off the balance each month, you are going to add to your debt with finance charges, interest, and even late fees.
Using credit cards does provide a number
of benefits such as:
- Price Protection
- Extended Warranty Coverage
- Return Guarantees
- Points for Other Purchases
However, don’t look to credit cards as a source of added
income. Keep your monthly expenses and bills within the amount of money that
your jobs provide.
This is such an important component of any healthy financial
plan. Savings can be the saving grace when it comes to unexpected expenses,
infrequent purchase needs such as school books or car maintenance and for the
occasional fun night out. Whether you are saving coins in a jar or on an app
(Like Acorn) or automatic withdrawal from
your paycheck to a savings account; saving money is important.
Create a way to save that is painless. Automatic withdrawal from checking to savings each month allows you to save before you even know you have the cash. Saving money as a family is another great way to increase your nest egg while also teaching great money lessons to your children.
It is never too early to start learning how to save money.
Help your children develop a habit of life-long saving.
Pay Bills on Time
There is nothing more senseless than incurring late fees.
Set up a system so that your regular bills are paid automatically from your
checking account. Most companies have this option now and it is a great way to
ensure that you pay your bills on time.
A large measure of your credit score is your history of payment. Paying bills on time is an easy way to help increase your credit score. The bad news is that those bills you have paid late stay on your credit history for YEARS. Just three late payments over several years can be the difference between a Fair credit rating and a good one.
If you are unable to pay your bills on time, contact your
creditor right away to make arrangements for payment. If you are in touch with
your creditors they won’t send a negative report to the credit bureaus.
If you are consistently unable to pay your bills on time, then refer to point one of your financial plans and make sure you are only spending what you earn.
Adhering to this simple, yet valuable, financial plan will
be the ticket you need to achieve a debt-free life. If you are struggling with
insurmountable debt, it may be time to call on an expert to help you create a
more effective financial plan.
Southern Illinois Bankruptcy Attorney law firm
Bankruptcy Advocates is located in Carbondale and serves a wide geographic community including Carbondale, Murphysboro, Marion, West Frankfort, Johnston City, Benton, Herrin, DuQuoin, and Pickneyville. We are a debt relief agency. Our southern Illinois bankruptcy attorneys help people file for relief under the Bankruptcy Code. Give us a call at 618-549-9800 or email us at [email protected] to speak about your case or legal matter. Convenient appointment times are available.