-- Create a budget. Examine last month's bank statement. Create a
budget spreadsheet armed with information about your wages, how much you
spend each month, and categorize your spending. Expense categories can
include: Rent or Mortgage, Gas, Groceries, Utilities, Insurance, Car
Payment, Credit Card Payment, and more. After you see how much you are
making, how much you are spending, and what you are spending your money on,
you will be better able to create a budget that works for you.
-- Cut expenses. Going out for lunch or dinner, daily trips to the
coffee shop, and more, add up. After creating a budget and examining your
spending over the last month, you will likely see expenses that can be cut,
which may add up to monthly savings in your bank account. Instead of
buying a daily cup of coffee, make a cup at home. Bring your lunch instead
of buying it everyday. And, cook dinner at home with your family or
friends instead of meeting up a few times a week. The combination of
coffee at home and a bag lunch a couple of days a week has the potential to
save more than $50 each month.
-- Tackle debt. Once you cut unnecessary expenses, you may find a little
extra money that can be used to tackle any debt you may have. To be truly
financially fit, work on paying down and eventually eliminating your debt
by paying more than the monthly minimum payment. The monthly minimum
payment may barely cover the interest the debt accrues, which means that by
paying the minimum each month, it could take more than a dozen years to pay
off the debt. By paying even a little more than the minimum, you are
working your way toward financial fitness.
-- Build an emergency fund. With each paycheck, make an effort to
contribute to a savings account separate from your checking account. Each
contribution, no matter the amount, builds a cushion for emergencies down
the road.
-- Enroll in a financial fitness course at a nonprofit NeighborWorks
organization in your community. Financial fitness courses can teach you
money management skills that can help put them on the path to decreasing
debt and increasing resources. Financial literacy can also help you become
more aware of common pitfalls -- including consumer scams and predatory
lending practices -- and how to avoid them. To find a NeighborWorks
organization near you that offers financial fitness courses, visit
www.nw.org/network/nwdata/financialfitness.asp.
-- Avoid being scammed. If you are facing financial difficulty from
foreclosure, job loss, credit card debt, and aren't sure where to turn for
guidance, seek help from a nonprofit HUD-approved housing or credit
counseling organization. Avoid scam companies that contact you first and
promise to "eliminate debt" in their advertising. Nonprofit organizations
have your best interest at heart and will work with you one-on-one to
remedy your situation. The old adage, "You get what you pay for," does not
apply with reputable nonprofits. To find a NeighborWorks organization or
other nonprofit HUD-approved housing counseling organization near you,
visit www.findaforeclosurecounselor.org.
For more information about financial fitness, contact Erin Angell Collins,
202-220-6317, ecollins@nw.org, or visit www.nw.org.
About NeighborWorks® America
NeighborWorks America creates opportunities for people to improve their
lives and strengthen their communities by providing access to homeownership
and to safe and affordable rental housing. Since 1991, we have assisted
nearly 1.2 million low- to moderate-income families with their housing
needs. Much of our success is achieved through our support of the
NeighborWorks network -- more than 230 community development organizations
working in more than 4,400 urban, suburban and rural communities in all 50
states, the District of Columbia and Puerto Rico. In the last five years,
NeighborWorks organizations have generated more than $15 billion in
reinvestment in these communities. NeighborWorks America is the nation's
leading trainer of community development and affordable housing
professionals. www.nw.org.
Contact Information: Contact: Erin Angell Collins 202-220-6317 ecollins@nw.org Doug Robinson 202-220-2360 drobinson@nw.org