Black Homeowners Guide - How to Build a Fortress Around Your Finances

I often tell Black Homeowners the best way to survive the current financial climate is to make sure you have a fortress of protection around your finances. Financial protection doesn't always have to mean denying yourself and your family the necessities or even some of the luxuries in life. But it does mean spending your money smarter so it stretches farther. Your money should also do more than one task at a time (multi-tasking money, how cool is that). Your money should also help protect your other assets.

Many African American homeowners experiencing financial hardship today failed to build a fortress around their finances. Not building a fortress around your finances is causing many people's debts to snowball and eventually overtake them.

Here's three simple ways to build a fortress around your finances. I call it my "Triangle Fortress". The three sides of protection is Quick Decisions, Account Protections, and Smart Shopping.

1. Quick Decisions. Can you make tough decisions fast after you have all the facts? The quicker you can make tough decisions after gathering all the facts, the sooner you'll start building your fortress around your finances and protecting yourself.

"Unfortunately one of the biggest mistakes most people make who experience financial calamities is waiting too long to take action", says financial consultant Seth Weintraub.

Soon the problem snowballs out of their control, making their money problems harder to handle than a greased pig.

2. Account Protections. (Note: Make sure you consult a qualified financial professional for specific laws in your state).

Do you know one of the major advantages the rich have always had? This one secret has allowed them to keep money in their families for generation after generation. For example, the old money rich like the Rockefellers, Kennedy's and Rothschild's place their money in places the tax man can't go.

Now the average or not so average person has places they can place and protect there money. For example ...

401K Retirement Plan. If you have access to a 401K or other retirement account make sure you're maxing it out. This is one of the few areas you have complete protection from creditors, a bankruptcy, lawsuit or even the I.R.S. A retirement account is one of the best ways to build a fortress around your money.

IRA and Roth IRA. The Bankruptcy Reform Act protects up to $1 million in IRAs, including Roth's, from creditors.

529 Plan. Another excellent way to build a fortress around your money is through a 529 college plan if you have children.

A 529 Plan is an educational savings plan managed by a state or educational institution. It helps families save money for future college costs. It's named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1998.

3. Shopping Smarter. When coming out of an economic high and diving into an economic downturn it's important to change your spending habits quick. Here's two habits you should make sure you're doing.

Comparison Shop. This is another way to help build a fortress around your finances. With so much pressure to buy, buy, and buy now, it's tempting to snatch whatever product or service is convent at the moment.

Impatient buyers are an overpriced stores favorite customer. Make it a habit to check at least 3 places or get 3 estimates before buying, especially big ticket items and services. With the internet, comparison shopping is easier than ever. Don't pay for what you can get free.

It's shocking to hear what people pay for everyday that they could get for free. If you follow this simple advice you'll save hundreds may thousands of dollars this year.

As tight fisted as you think your Federal, State and Local governments are, they offer a slew of free and low cost services.

Most people never take advantage of these free and low cost services, but instead pay companies because of convenience or they simply don't have the information. For example, do you take advantage of free government books, pamphlets and other information you can get from the Government Printing Office?

The books and pamphlets are on thousands of different subjects. Most states offer free or no cost medical clinics, vaccinations and health care information and more.

Even your local library offers free books of course, but that's not all. You can also find low cost CD and DVD rentals, free lectures and classes on different topics. Free internet access is also available and more.

Second best is sometimes better. When the economy was flying along everyone wanted the best, in fact many advertising slogans revolved around "You deserve the best ... Because you're worth it." Remember that?

But did you know second best can often be better? It all depends on what you're using the product for. The object of spending smarter is not always buying the best, but buying the best for your particular circumstance.

For example, do you need the best car to get you back and forth to your job everyday? Do you need the best shoes to do yard work? Or do you need to have the best computer if all you do is send and read email a few times week?

If you follow these tips you'll quickly be on your way to building a fortress around your finances. I'll offer more tips in future newsletters. Because the next best accomplishment after making money is protecting your money.