The Well Magazine Summer 2012 - Page 24

Living Well: Finances The ABCs of Financial Freedom Steps to take to get out of the red and into the black in your finances. A Act Acknowledge Acknowledge where your finances are. Take stock of your financial situation. Know how much debt you are in. Write down how much you spend every month. Accept B Budget Build Basics The facts are the facts. Deal with them. Accept the fact that you may have messed up or might need to tighten up and make some changes. Now that you know where you’re at, do something to get where you want to be. Get a plan of action and pursue it. Make a list of your debts and pay off the smaller ones first to gain momentum ( see Dave Ramsey Debt Snowball Plan). Get back to the basics: Don’t spend more than you earn. Live within your means. Don’t rely on credit to pay your monthly expenses. Call it a budget or a financial plan. Whatever you call it, write it down and follow it. Build an emergency fund of at least $1,000 immediately. You know that an emergency will come up. Cars break down. Things need replacing. Unexpected expenses pop up. After your emergency fund, pay off your debts (see A for Act)