As a nationally ranked Top Producing real estate Broker, I get asked many questions about real estate. The First of which is almost always, “Ms. Dee, what do I need to do to buy a home?”. The answer to WHAT is…you need to save, fix credit, pay off debt & sometimes settle specific outstanding collections. Yeah, yeah, yeah! The reality is not that we don’t know what to do, it’s that many don’t know HOW to do it. The HOW makes the difference. So, this article is a simple5 stepset of instructions on HOW TO SAVE MONEY WHEN YOU ARE SHORT ON MONEY!
STEP 1: ACCEPT THE TRUTH: if you made more money you would spend more, if you made less you would still survive. You will never get out of debt if you’re thinking that you need to get out of debt first before you start saving. People get further in the whole because we aren’t financially prepared when life happens. Without savings, we get hit hard when life’s surprises &unexpectant bills hit us. Pennies, nickels & dimes add to dollars. Make savings a bill & start paying it. Try it!
STEP 2: KNOW YOUR NUMBERS: Subtract your bills from your income. You may be shocked to find that you have extra dollars to save. This is the money that needs to be saved. Create & live by your budget. Email [email protected] to receive a free sample budget. Your budget needs to include the debt you’re ignoring; thatstudent loan isn’t going anywhere & one trip to the emergency roomwithout insurance is all you need to bomb your credit score.
STEP 3: Take Control of Your Bills: Set up auto pay through your bank, NOT through your debtors. This way you control when & how your bills get paid without the risk of being hit with NSF fees. Add EACH & EVERY debt & bill you have as a payee through your bank’s online banking system. Don’t panic, I didn’t say pay them yet, ADD THEM! Why? So that you can pay them at the click of a button when you are ready & in a position to do so.
STEP 4: OK OKNOW PAY THEM: Select the bills that must get paid by certain dates & set them up on a RECURRING weekly auto pay. By setting the priority bills up on auto pay you ensure that they will be paid if the money is in the account.
STEP 5: OPEN A SAVINGS ACCOUNT & JUST SAVE– Create systems that allow you to do what you need to do & systems that protect you from yourself. Open savings accounts that are separate from your frequently used banks & that are not easily accessible. Schedule direct deposits from your payroll into those accounts. Everyone’s finances are different, but you may want to start with savings 10% & work up to saving 30%. Reduce or increase every 3-6 months.
Savings is something many of us don’t do enough of quite frankly, so many of my clients believe that they don’t have enough money to save. The reason most people are living check to check is because we don’t save. Savings is a must & can start with $10 a week. Don’t laugh, what do you have saved up now?
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