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TEN BASIC RULES OF MONEY MANAGEMENT

1 GET ORGANIZED - Designate a work space, filing system, and have supplies handy.

 

2 PLAN & SET GOALS - Determine short, mid and long range financial goals. Plan for the present and the future (major purchases and periodic expenses).

 

3 KNOW YOUR FINANCIAL SITUATION - Determine monthly living expenses, periodic expenses and monthly debt payments. Compare outgo to monthly net income. Be aware of your total indebtedness.

 

4 DEVELOP A REALISTIC BUDGET - Follow your budget as closely as possible. Evaluate it periodically. Are actual expenses matching your budget plan? If not adjust spending or your plan to be on target.

 

5 DON'T ALLOW EXPENSES TO EXCEED INCOME - If you discover your monthly income is less than your expenses, look for areas to reduce expenses (coupons, comparison shopping on groceries, reducing money spent eating out) and ways to increase income. Don't use credit to fill in the gap. This creates a false sense of security and will eventually catch up with you.

 

6 SAVE - Save for periodic expenses, such as car and home maintenance. A goal should be to accumulate 3 to 6 months living expenses in an emergency fund. Consider 5 to 10 percent of your net income as a monthly savings target.

 

7 PAY BILLS ON TIME - This will help you maintain a good credit rating. If you are unable to pay as agreed, contact your creditors and explain your situation. Also contact Consumer Credit Counseling Service for professional advice.

 

8 DISTINGUISH BETWEEN YOUR WANTS AND YOUR NEEDS - Take care of your needs first. Money should be spent for wants only after needs have been met.

 

9 USE CREDIT WISELY - Plan your credit purchases. Don't charge more every month than you are able to repay. Avoid paying only the minimum on your charge cards. Determine what you can comfortably afford to purchase on credit. Shop for your credit comparing interest rates, terms and conditions. Don't allow credit payments to exceed 20% of your net income (excluding home mortgage). Avoid borrowing from one creditor to pay another.

 

10 KEEP A RECORD OF DAILY EXPENDITURES - Be aware of where your money is going. Use a spending diary, checkbook register or envelope system to help identify where adjustments need to be made.

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