Smart Money with Arese: Balling on A Budget

Four Important Resolutions

• Manage your lines of credit in the most responsible way you can. If uncontrolled spending and payment delinquency inflicted severe damage to your credit history this year, then you need to make the necessary changes in your credit activities which will allow you to effectively handle your credit accounts next year. This may involve limiting the frequency with which you use your credit cards, until you are able to completely settle your financial obligations. You may also decide to set up personal reminders or to sign up for automatic payment arrangements so that you can always keep up with your monthly credit charges. By employing these simple suggestions, you can succeed not only in keeping your interest and credit payments low, but more importantly, in managing your alternative sources of funds in the best way possible.

• Stick to a realistic, personal budget. Another thing that can help you regain control over your personal finances is to stick to a realistic financial plan. We advise you to carefully examine the state of your personal finances by paying attention to your income and monthly expenses. Try to identify which expenses are necessary and which are not. This way, it will be easier for you to develop a list of items that you definitely need to spend cash, on each month. By doing so, you can maximize the use of your financial resources, and at the same time, you can have the assurance of having sufficient funds to cover all your expenses.

• Establish a contingency fund. Since we cannot foresee what will happen in the future, it will be an excellent idea for you to prepare funds for emergency situations. So, apart from setting aside funds for your personal savings, we also encourage you to create an account for contingencies. This way, you will have a good source of cash that you can tap on to finance urgent needs that may arise in the future. And you can do so, even without relying on credit accounts which usually impose high rates of interest and fees.

• Strictly monitor what you spend cash on. Although it is not a bad idea to reward yourself each time you reach a financial milestone, still, we want to remind you to strictly monitor what you spend cash on. Try to keep receipts of all your purchases as well as proofs of payment for your bills and credit charges. In so doing, you will know how exactly you spent your financial resources for the past month. And more importantly, you can make the necessary adjustments to your budget, so that you will have enough funds to cover your day-to-day expenses for the next period.