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Recession has hit and many people are facing the start of the year without a job, with many more uncertain about the year ahead. Now is the time to review where your finances are now, in order to determine where they are heading in 2009.
A few simple steps can make a huge difference to your finances.
Create a budget
Living by a budget does not have to be constrictive. It will often allow you to spend the money you have worked hard for in a way you want to and help you stretch it even further. The most important thing is it puts you in control of your finances.
Become more organised
Keep all of your financial documents filed in one place. This will stop you having to search for hours on end for misplaced paperwork and you will have a ‘financial centre’ that you can review regularly and efficiently.
Consider paying bills online
This is a particularly useful service for people, who are away from home a lot, are forgetful or who always put things off. This system is perfect for payments that are for the same amount each month, like mortgages or car loans.
Keep a track of what you are spending
Purchasing large and expensive items are not always the reason we are short of money each month. Often the small and unnecessary payments can be to blame. Write down every cent that you spend over a 30-day period and review your expenses to see how much under or over your spending budget you were.
Set money aside to save
Put any windfall money into a savings account, including pay rises and bonuses. If you are not fortunate enough to receive such pleasures, try to put 10 per cent of your take home pay into an interest bearing account and leave it alone. If 10 per cent is currently too impossible to manage, start at 5 per cent or a figure you are happy with and try to increase it slightly each month.
Try to tackle your debts
It is impossible to get out of debt if it is being added to each month, especially on credit cards. Try to make purchases with cash or on a debit card.
If you are in a financial hole, stop digging!
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