The Ten Commandments of Financial Common Sense

Most everyone knows you need to budget, balance and save. However, here’s a list of the ten steps to ensure you walk on stable financial ground.

  1. Set a budget and stick to it – Make financial goals and then create a budget that supports those goals. Account for expenses on a monthly basis and set budget limits for dinner out and other forms of entertainment.
  2. Pay off all debt (except a home mortgage) – Make debt payments a part of your budget until paid off.
  3. Set aside money for future expenses – Plan in advance for both short- and long-term big expenses and create a line item for them in your monthly budget.
  4. Save for emergencies – Set aside funds each month to build a reserve of three months living expenses (eventually build up to six) to guard against job loss or unexpected expenses. Having these savings automatically deducted you’re your income makes it easier.
  5. Take advantage of available plans – Company-sponsored 401(k) plans and/or other retirement plans, 529 savings plans and education funds will help you financially later. A little put away today can mean a lot is available tomorrow.
  6. Spend only what you have – Limit uses of credit vehicles like credit cards and high interest cash advances. Pay off credit cards by due dates each month.
  7. Manage your financial life – Regularly manage and monitor your accounts and statements, including balancing your debit/checking account and investment accounts.
  8. Keep an eye on your credit score – Making timely payments is one of the best ways to maintain good credit for future lending. If used responsibly, automatic payment systems like online banking can be beneficial.
  9. Set up Identity Theft Protection on your financial accounts – Regularly change your online and mobile passwords, and safeguard your financial statements.
  10. Openly communicate with your spouse about your family’s financial position – Make sure you both agree on short- and long-term goals. Teach your children the power of saving and budgeting to put them on the path to a successful financial future.