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Take Control of Your Personal Finances

This may come as no surprise, but three out of four Americans hate financial planning.

This may come as no surprise, but three out of four Americans hate financial planning. Many of us like to dream about things such as buying a new home, traveling to an exotic place, sending our kids to a great college, or retiring early. Unfortunately, the reality of financing those dreams often prevents many of us from living them out, which may explain, in part, why so many people hate financial planning.

But it doesn't have to be that way, says Sue Mead, a financial planning professional with a new Web site called IHateFinancialPlanning.com (www.ihatefinancialplanning.com). With some patience, planning and discipline, you can achieve some if not all of your dreams, and at the same time, feel better about yourself and your money.

The key is to start now. And the best place to start is with a financial plan, which can help you get your arms around financial issues like credit card debt, insurance needs and retirement savings. "We know that millions of Americans hate looking at their financial picture," says Mead. "But with ihatefinancialplanning.com we try to make it fun, easy to understand and very doable."

To help you get started on the road to less worry and greater financial freedom, ihatefinancialplanning.com offers the following tips:

Set realistic goals. Want to retire a millionaire? Odds are good that if you create a financial plan today, reduce your debt and begin saving regularly, you may be able to live more comfortably, with less worry and maybe even retire as a millionaire. First step: set some realistic goals about how you would like to live now and in the future. Next, begin learning about how to manage your money better, and develop a financial plan that will help you achieve your goals - even if you're living paycheck to paycheck. You can create one yourself, but sometimes it's best to work with a financial professional who can lend some perspective on your personal financial situation and help leverage all of the financial resources available to you.

Track your daily spending: It's never the big things that surprise people about their spending. It's the little stuff, like the $2.50 you spend on a cup of "designer" coffee each morning, the $8 for lunch, or the 50 cents for a mid-afternoon cola. If you really want to get a handle on your finances, ihatefinancialplannng.com recommends writing down every expense down in a small notebook - even the 50 cents you just spent on a candy bar. After several months, you'll see the hard truth about how you spend your money. That's good; it will help you identify where to cut back. For example, if you brought your lunch to work each day, rather than buy it, you could probably save about $130 per month, which could be invested in a mutual fund.

Create an emergency fund: Rainy days happen in everyone's life. The real problems begin when you're caught off guard. Commit today to save enough money equal to at least three months of living expenses to cover unexpected events, such as being laid off from your job, car repairs, weather damage to your home, etc. If you can't immediately set aside that amount of money in a savings account, start by putting away a little bit from each paycheck into an emergency savings fund.

Pay off debts, especially credit cards. The average American carries a $7,000 credit card balance. Yikes! If that card carries an annual percentage rate of 15.9 percent, and a person makes a monthly payment of $100, it will take 58 months to pay off. That equates to about $1,736 paid in interest. On the other hand, if a person pays $200 per month, that bill will be paid off in two years, which equals $676 in interest. That's a savings of $1,060. Debt, especially credit card debt, can strangle your financial plan. Remember, the more quickly you rid yourself of debt, the more you have to invest to achieve your dreams.

Make sure you're insured: Insurance is no laughing matter. While many of us don't appreciate paying for it each month, we never regret it when we need it. Make sure you're taking full advantage of health, life and disability income insurance offered through your workplace. If you have a family, contact one of the major insurance companies (avoid insurance sold through TV and radio infomercials) about additional low-cost term insurance to cover the loss of the primary wage earners in your family.

Take full advantage of your company retirement plan: Many companies offer a retirement program, such as a 401(k) plan, which may involve a match from your employer. If you're not participating in your company's retirement program, that's like throwing money away - either money you'd pay to the government in taxes or matching money from your employer. Make sure you're at least saving a portion of your paycheck (ideally at least 10 percent) to take advantage of the employer match, and if you can, save more.

Start investing in yourself: It's important to pay the bills each month, but it's equally important to pay yourself and begin investing to achieve some of your life's goals. One of the easiest ways to begin is by starting a systematic investment plan where money is automatically withdrawn from your savings/checking account each month and invested in mutual funds. Even if it's just $25 a month, the discipline of investing can lead to a sizable account over time. Check with your workplace to see if they have an automatic savings program, or click on ihatefinancialplanning.com, which offers Instant Investor, a feature that allows you to invest from a selection of nine mutual funds.

Don't be afraid to ask for help. Personal finances can seem mind boggling, and sometimes downright intimidating. But don't feel you're alone; people of all ages and all incomes may feel like you do. When you have questions or need help, there are many places to turn. For example, besides being informative, ihatefinancialplanning.com offers a 24-hour response to e-mail questions. In addition, the site can help you find a financial professional near where you live.

Courtesy of ARA Content, www.aracontent.com, e-mail: info@aracontent.com

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