Controlling Your Financial Future

Getting in complete control of your personal finances is much easier said than done. More likely is that you are, at least in part, being controlled by your finances than the other way around. Even though the world’s economy continues to inch back from the brink of 2008, many people are finding it increasingly difficult to get in complete control of their financial situation.

Although the suggestions below may seem very intuitive and simply common sense, when they are practiced along with other methods they can put you squarely on the road to financial security.

To begin with the most obvious, the most important part of managing your finances is to conserve as much of your cash as you can. This can be difficult when the entire culture is designed to entice you to buy something right now. And there is no denying the appeal of owning the latest smart phone or tablet but if you are serious about controlling your financial future you must make the critical distinction between wanting something and needing something. For example, you need to pay your mortgage or rent but you want a new phone. A decision needs to be made and only one is correct.

When faced with the choice outlined in the last paragraph too many opt for both and put the new phone on a credit card. Without question, credit cards are very convenient and having a line of credit can, quite literally, be a life saver in times of emergencies. But they are also a trap because they make it so very easy to spend money you don’t really have.

Falling into credit card debt beyond your ability to pay more than the minimum requirements each month is maybe the worst thing you can do to your personal finances. Not only are you paying absurd amounts of interest each month but you have already used your emergency life line as well. If you find yourself in this predicament, concentrate on paying off one card at a time until you are clear of debt. Call the companies and see what they are willing to do to help. Many will temporarily suspend interest payments, or reduce amounts owed for a period of time. I can’t stress enough that you must do what you can to pay off your cards and don’t use them unless it is a true emergency.

Knowing where your money goes is important. This is called a budget. Once you make a list of all your monthly expenses and all your monthly income you will have the information necessary to start building a stable financial future. And don’t forget to pay yourself as well. If your employer offers a 401(k) plan, sign up for it. All money you contribute to your own account come off the top which reduces your current tax liability while building an income for the future. And once you have your budget established, don’t deviate from it. This is your roadmap to a better future.

Finally, it is worth the effort to get a copy of your current credit report. And, despite the commercials you don’t have to pay for it. This is from the Federal Trade Commission website: “The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.” Visit the site for instructions on how to order your free report.

Once you have your report, go over it for errors and correct any you find. If your score isn’t great, the actions outlined above will help it to improve over time. The higher your credit score the less you will have to pay in interest rates for car loans or home mortgages.

Putting your financial house in order isn’t painless and does take self-discipline and effort. But the payoff is worth the effort.

Also look on our article about book value vs market value. Here you can get the detail about book value and market value, what is price ratio and how to create the valuation reports for any business. Using various business valuation methods.

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