Managing Your Money in 2006

By: Althea Paul
By: Althea Paul

January 3, 2006

Setting goals for the new year often includes financial goals. If you want to reach them in 2006, now is the right time to put a plan into action. Most everyone has some kind of a plan for their finances this year.

"I'm going to get a house and make that investment," said resident, Matthew McDowell

"I was thinking today about money and I figured I'll probably try to invest more," added Bernard Hankins.

No matter what, it seems we all want to manage our money the best we can, so if you're in debt, how do you go about getting out? First, try to cut back on features you don't use in services, such as with cell phones and the internet. It could save you about $100 a month. Next, do not spend your whole paycheck.

"If you live within 60 percent of your take-home pay, we recommend clients put 10 percent into big purchases, things that would swamp their budgets, and that way they're putting that money aside and then they can spend out of it, and then 10 percent into retirement, five percent into taxable savings, and another 10 percent for gifting if they do that," said president of Marotta Asset Management, David Marotta.

The average American has about $8,000 in credit card debt, overwhelming for many.

"I really gave up my credit cards. I wasn't doing a very good job of keeping up with them," said former credit card user, Paul Reynolds.

Experts say the key to getting back on track is making it hard for yourself to spend.

"They should keep a budget. They should write down everything they spend. They should rip up their credit cards and pay for everything in cash, then when they go to the bank and have to get out cash, it's a pain to go to the bank and get out cash" said Marotta.

It's also a good idea to have savings and investments automatically taken out of your paycheck. All of these are moves that should bring you a few steps closer to becoming financially secure in 2006.

Another suggestion would be to tell others about your goals because experts say with a plan you're more likely to achieve them.

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