Submitted by: Rachel Schwartz

What s your New Year s resolution? Every year, we make plans for every aspect of our life. Bulk of these plans and a major part of our hopes and dreams is financial freedom. Almost everything seems to be solved by money. Surprisingly, even relationship problems that lead to separation and divorce are often rooted in money matters. So everyone just wants to break free of debt and any problem relating to money so they can start moving on with their lives. How do we really start when we re drowning in debt?

The famous management guru, Stephen Covey said, First things first. You must first know your current situation: How much you are earning vs. how much you are spending. Are you living beyond or below your means? It all starts with the small things like keeping your pay slips and writing down your daily expenses. You don t have to be an accountant to monitor these things. Do you have more than one job? Do you have a business? Write down all your sources of income. How much do you spend on gas every day? How much is your average bill on utilities, phone, cable and internet? One tip for getting a picture of your average expenses is by collecting receipts and credit card statements from the past months. You can create a simple budget worksheet and print it for the details of your cash flow.

After tallying and totaling, you might be surprised to find out that your expenses are bigger than your income. Start to evaluate if all of your expenses are necessary most of the time, we spend too much on wants rather than needs. Imagine if you can cut down on your expenses and put the extra money for your emergency fund and savings.

If your income is larger than your expenses, you can start setting aside money for an emergency fund. Your emergency fund should be about five to six times your monthly income. This means that even if you lose your job or anything happens that won t allow you to earn income; you can survive for about half a year.

Remember, your emergency fund is different from your savings. Set aside a percentage of your salary for savings, too. Then, once your emergency fund is secure, consider investing on stocks or a small business where you can make your money grow. Like what Robert Kiyosaki, author of Rich Dad, Poor Dad said, the income from your investments should be the one used for your expenses. Change your habit of buying a new item that you want every pay day. Set up your investments first and think long term.

Budgeting is only one of the things you can do. You can also seek expert advice from loaning companies and find out how you manage your debts. Learn how to consolidate debts from financial experts. You ll be surprised how smooth sailing many things in your life will be once you get your finances fixed. As early as now, start thinking about your retirement plan because what you do today will definitely have a big impact tomorrow.

About the Author: Rachel Schwartz is the Marketing Manager of BHM Financial – one of the most trusted names in the bad credit loan industry. This company may be able to help you reach your financial goals. Please visit our Bad Credit Loans website or our Blog and find out today.

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