Achieving financial goals during times of economic uncertainty may seem especially daunting. Managing daily expenses can overshadow the importance of long-term planning, especially in the midst of an economic recession. However, experts say a good dose of financial discipline can help you attain your goals.
“A lot of it is almost about being ruthless, taking a dictatorial approach to your finances,” says financial planner Andrew Head, director of Western Kentucky University’s Center for Financial Success in Bowling Green.
Taking control of personal finances starts with a few basic steps:
Get serious about budgeting. Monthly budgeting is an essential part of household financial management. Head recommends using web-based applications or low-cost software to chart monthly expenses. “It gives you a bird’s-eye view of your overall finances, which is absolutely necessary,” he says.
Focus on reducing debt. Pay off the debt with the highest interest rate first, which usually is tied to credit cards, says Paul Gregg, instructor of finance at the University of Central Florida in Orlando.
Don’t neglect savings. Never forget to save. “Even if you have to reduce your savings, make it a part of your overall plan,” Head urges.
Keep utilities in check. Gregg recommends ditching a landline telephone in favor of a basic cell phone without texting and mobile web features. “A cheaper plan with a dumber phone will save you a lot of money,” he says.
Invest in education. Enroll in courses or study on your own. “Information is available for those in search of help,” Head says. “Take care of yourself. Very few people care as much about you as you.”