Financial Order

Day 29-Getting Your Finances in Order

Getting your finances in order can be a huge job, especially right out of school. Living on your own for the first time means big new responsibilities. Even folks living on their own for a while can struggle. But if you take things one step at a time and keep your self together, it can start running on its own.

So, now that it is almost the end of January, here are some tips:

1. Get your 2008 Credit Report- According to law, you are allowed one free credit report a year, so you might as well take it. Getting your credit report can be extremely helpful. www.annualcreditreport.com will get you in touch with the three major credit report companies. I got mine. Not only did they not have my new address, but I also found out I owed *a lot* more to the Department of Education for my student loans than I had thought. That made me rethink my budgeting plan.

2.Track every Penny- I dusted off my old quicken account but I also looked into Mint.com and wesabe.com. I personally liked the ease of quicken. But Mint and wesabe both had really neat functions. Knowing exactly where my money goes allows me to reassess my priorities. (Did I really need that forth burrito from Chipotle?)

3. Make a budget- There are two schools of how to make a budget. One involves planning ahead and deciding how much you are willing to spend in the next day, week, month, year on different things. The other involves tracking your spending and reacting to your needs. I personally like the latter. While I wish I were more proactive, I am also not psychic. I cannot correctly assess how much I will spend next week on things and I like to freedom to be able to spend if I can. I do set goals however. To keep track of my budget goals, I took the advice of J.D. at Get Rich Slowly with a Spending plan.

4. Snowballs and Snowflakes- One image that would always make me laugh when I was little was when, in the cartoons, a single snowflake would fall of a tree and roll down a hill getting larger and larger. First, it would be pea sized, the golf ball, then baseball, basketball. It would get bigger and bigger, and faster and faster. Until it was huge! And it would crush the villain. Debt can be a lot like that. Debt relief can be a lot like that too. Put any extra income you may receive directly to debt relief. Those snowflakes might not seem like a lot. But, snowflakes can become big things. Check out I've Paid For This Twice Already... for a great primer on snowflaking your debt away.

With successfully accomplishing goals 1, 2, and 3, I have found goal 4 much easier to accomplish.


Competence Moment Highlight- Treating myself to a burrito after two weeks of not eating out.