Ten Basic Rules of Money Management

1. PLAN- Plan for the future, major purchases and periodic expenses.

2. SET FINANCIAL GOALS- Determine short, mid and long range financial goals.

3. SAVE- Save for periodic expenses, such as a car and home maintenance. Save 5%-10% of your net income. Accumulate 3 to 6 months salary in an emergency fund.

4. KNOW YOUR FINANCIAL SITUATION- Determine monthly living expenses, periodic expenses and monthly debt payments. Compare outgo to monthly net income. Be aware of your total indebtedness.

5. DEVELOP A REALISTIC BUDGET- Follow your budget as closely as possible. Evaluate your budget. Compare actual expenses to planned expenses.

6. KEEP A RECORD OF DAILY EXPENDITURES- Be aware of where your money is going. Use a spending diary to assist you in identifying where adjustments need to be made.

7. DISTINGUISHING THE DIFFERENCE BETWEEN WANTS AND NEEDS- Take care of your needs first. Money should be spent for wants only after needs have been met.

8. DON'T ALLOW EXPENSES TO EXCEED INCOME- Avoid paying only the minimum on your charge cards. Don't charge more every month than you are paying to your creditors.

9. USE CREDIT WISELY- Use credit for safety, convenience and planned purchases. Determine the amount that you can comfortably afford to purchase on credit. Don't allow your credit payments to exceed 20% of your net income. Avoid borrowing from one creditor to pay another.

10. PAY YOUR BILLS ON TIME- Maintain a good credit rating. If you are unable to pay your bills as agreed, contact your creditors and explain the situation. Contact Springboard Non-Profit Consumer Credit Management for professional credit debt advice, and inquire about our credit counseling service

Springboard is a non-profit credit counseling and financial education organization founded in 1974.

Jeff Michael
Author of "Repair Your Credit and Knock Out Your Debt"

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