Dear Dr. Terri K: They say the economy is coming out of recession but it still feels like a depression! I’m getting concerned about my finances. I’ve not been very focused on managing money but now I’m feeling the pinch of higher prices all around. My salary hasn’t gone up… so what should I do?!? – MARK, New York
MARK: First, congratulations for opening your eyes to your own economic reality. Here are some suggestions to keep your energy in tact and maximize your new situation:
Create a budget. Look at your pay stubs and your bills from the last three months. Take an average of each expense such as cable, telephone, groceries, etc. to create your budget.
Streamline your spending. Compare your average monthly income to your average monthly spending to understand your bottomline. See if there are areas of spending you can streamline. Cut back on non-essential items and reconsider major purchases.
Distinguish between needs, wants and heart desires. A need relates to food and shelter, a borrowed want is that new Lexus your neighbor has, and a heart desire may be a home where you can ride a bike and walk to work. It’s okay to want things. The problem occurs when you acquire things mindlessly – particularly if you don’t actually have the money to pay for them.
Stick to saving. Consistently add to your savings. A little at a time will go a long way over time. Contribute the maximum to your 401K at work and/or Flexible Spending Account. Pay more than the minimums on your credit card bills to reduce debt. Try to save at least three months of expenses in case of a layoff or illness.
Shop online. Instead of running around to various stores, comparison shop online and save time, money and fuel.
Sharpen your skills. To hedge against a layoff, make yourself invaluable at work by hitting your deadlines and networking inside and outside of the company. At the same time, see how you can use your skills to create passive income. For example, write articles on your favorite subject as a freelance contributor, or start an online business.
It all starts with the Power of Choice. Make a choice today to take control of your finances. Start Power Living® Today!
Contributed by Teresa Kay-Aba Kennedy, Ph.D., MBA. Part of the Power Living® Empowerment Series.
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