September is Self Improvement Month. Any self-improvement project can be difficult to start and even more difficult to maintain. (How many of you are still following your 2004 resolutions? Do you even remember what they were?)
A self-improvement project can be simple or complex, but any improvement effort must have goals.
Setting goals can seem scary but it basically comes down to this: if you don’t know where you’re going, how will you know when you get there?
means time to improve
your financial outlook.
To answer that question you’ll want to keep your goals SMART: Specific, Measurable, Achievable, Realistic, and Timely. Forgetting any one of these elements can seriously compromise your ability to achieve your goals.
What about improving your financial outlook? Doesn’t that qualify for self-improvement? It sure does! Developing the skills and mastering the behaviors necessary to improve your financial outlook are a definite effort toward self-improvement and this effort requires SMART goals too.
What hints can Defeat Debt give you to assist you in achieving this worthy goal? Well of course, first, get your budget in gear! Is your budget working for you? Do you know what you have coming in and going out each month? If your budget is not working, this is the time to figure out why.
Next eliminate waste. What are you spending money on that is truly unnecessary? What are you spending money on that is not helping you achieve your goal? If something in your budget is not working toward your goal, eliminate it!
Then make every effort to decrease your debt. We know you’ve heard this before but that’s because IT’S IMPORTANT. Don’t forget your basics, like avoiding the build-up of lots of debt on credit cards (your DMP works for you here), using care when increasing your mortgage debt (talk to the CAF Housing Counselors for housing goal coaching and ways to ensure you are making wise mortgage choices for your situation), and (if you’re a student) limiting student loan debt. All of these can create big financial problems if you should have to face one of life’s financial setbacks like illness, divorce, income reduction, or job loss. The best rule of thumb: never get in debt just because you can (pre-approved offer) and never access more credit than you absolutely must.
Need some ideas of smart ways to spend money that can actually help you avoid financial hardship? One smart way is to get and keep health insurance of some kind. When the experts at Harvard say that medical bills are a factor in 1 of every 5 bankruptcies filed nationwide, we must recognize that when attempting to improve (and protect) ourselves financially, insurance will play a vital role in achieving our goal. To minimize the costs of insurance check with your state to see if they offer special rate policies for those with low-income or consider a higher deductible on a policy that can assist you with catastrophic medical bills.
Now is the time to
check your budget.
Is it working for
Finally, also consider, creating a savings plan for emergencies. Forty-three percent of us have less than $1000 saved that we could access in the case of an emergency. Did you know that sixty-six percent of all American households would not survive more than three months of unemployment without serious financial difficulty, and the average length of unemployment is eight months?
Experts recommend that families, at minimum, have cash equal to three months worth of expenses, preferably six, for emergency situations. Without a plan or goal this will be difficult at best.
If necessary, start your savings plan small, but do it now. Even $25 a month will start to add up. Better yet, take advantage of any savings programs offered through your employer or opportunities for payroll deductions into savings accounts-before you ’see’ the money.
Once you complete your DMP you will already have created a habit (or new behavior) to set aside funds each month. Right now it’s to pay off debt, but later it can be a strategy for a beautiful savings plan.
So celebrate September as Self Improvement Month. Review your financial outlook, update your financial goals and set your sights on improving your financial future.