Finance
6. Make a will
Making a will is especially important
if you have children. It enables you to
name guardians to watch over them.
A last will is also critical if you own
significant or complicated assets.
7. Create a budget and stick
to it
Creating a budget is a critical step
in getting your finances in order and
it’s not difficult to do. Sticking to it
is another matter! In a notebook or
spread-sheet, write down all your fixed
monthly expenses. Next, write down
your other “non-fixed” expenses such
as meals out, entertainment, clothing,
and other discretionary purchases.
Writing it down and seeing it on paper
helps you to understand where your
money goes each month and where
you can cut back. Once you’ve made
a budget, you have to stick to it. Every
time you buy something, write down
the amount and what you bought.
Compare your actual spending to
your budget to see where you’re
getting off track. You can also check
out budgeting and expense-tracking
software like Microsoft Money.
8. Reduce your de bt
Another difficult-but-necessary step
in getting your finances in order is
consolidating and paying down debt.
You should pay at least double the
minimum payment plus the finance
charge every month. Transfer balances
to one or two cards with low APRs to
help you keep track of credit card debt.
Destroy or freeze your other credit
cards, so you don’t use them. Use cash
or debit cards instead of credit for all
purchases. If you don’t have the cash
on hand, don’t buy it.
9. Set up an emergency
fund
We all know the importance of having 2
to 3 months of income on hand in case
of emergency, but in tight economic
times, it can be difficult to do. If you’re
really short on cash, try putting every
20aed bill you get into a box, or even
emptying all your change into a jar at
the end of the day. Tricks like these do
work and they will add up over time.
Better yet, write yourself a check, even
if it’s only 100aed every time you get
paid and place it in a special account.
Another alternative is to take a chunk
of money out of your savings and
invest it in a Certificate of Deposit (CD)
with a penalty for early withdrawal.
10. Safekeeping for financial
documents
Finally, real estate deeds, trusts, wills,
401ks, IRAs, and other important
financial documents should be kept
in a safe place that a trusted friend,
attorney, or family member knows
about. Also make copies of driver’s
licenses, passports, and credit cards in
case of loss.
After The Bell
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Sep - Oct 2015
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