|
This
Year, Resolve to Clean Your Financial House
Freedom Financial Network Offers
5 Tips for Starting the New Year Right
San
Mateo, Calif., Jan. 4, 2006 – With higher consumer
prices, rising interest rates, a cooling real-estate
market and ID thieves lurking around every corner, it
is more important than ever to have a strong financial
game plan. And because there is no time like the New
Year to get your personal finances in order, Brad Stroh,
co-CEO of Freedom Financial Network, LLC, suggests five
tips for getting your family on solid financial footing.
1.
Know Your Goals
Sit down with your family and set both long- and short-term
personal goals. You don’t want to go through life
as a rudderless ship, so make sure your financial strategy
is taking you somewhere you want to end up. “Whether
you want to take a trip to Europe this summer, buy a
home in three years, plan for impending retirement or
simply go for a walk every week, the important thing
is that you plan to meet these goals,” Stroh explains.
Once you have your personal goals on paper, make sure
your financial plan is congruent with them.
2.
Create a Budget
Managing cash flow is the foundation of a solid financial
game plan. “The best way to proactively direct
your cash flow is through a budget-driven personal financial
strategy,” Stroh says. Based on the personal goals
you wrote down, your strategy should help you become
free of liabilities, accumulate assets and use your
positive cash flow and assets to build a positive net
worth.
Begin
by detailing your ongoing monthly expenses (fixed expenses
like rent or mortgage payments). Add variable expenses
that are “must-buys” (food, gas, medicine),
and then leave categories for savings and spending cash
(for unexpected expenses and entertainment). Add your
monthly net income (the amount left after taxes and
other paycheck deductions such as health insurance and
401(k) contributions).
“If
your bottom-line cash flow is negative or does not help
you achieve your short- and long-term financial goals,
do a ‘gut check’ and find a way to either
increase your income or reduce your expenses,”
Stroh suggests. (Note: Getting rid of credit card debt
is frequently the best way to free up your free cash
flow.)
3.
Make Sure Your Credit Report is Clean
You now can go to www.annualcreditreport.com and pull
your free “tri-merge” (all three major reporting
bureaus) credit report once a year. If you find errors
or misrepresentations, send a letter directly to each
agency requesting the item be corrected or removed.
If the report contains negative information that is
factually accurate, send a letter explaining the cause
of the derogatory mark (e.g., divorce or medical hardship
made it impossible to pay your credit card payments
two years ago). Ask the reporting agency to append the
explanatory letter to your profile. “This process
will improve your future access to credit and help you
get a mortgage, credit card or installment loan on terms
that meet your financial strategy,” Stroh explains.
4. Protect Yourself From ID Theft
Identity theft is at an all-time high, and most of it
occurs “offline,” not through the Internet.
You need to protect yourself from unscrupulous individuals
who could go through your trash, steal your account
numbers online or get personal information through complex
“phishing” scams. First, make sure you record
all important financial information and account numbers
in a secure place (a “post-it” on your work
computer does not qualify as secure). Next, shred all
documents that have your personal information on them.
Lastly, shop online only at stores you trust, and never
give out personal information in e-mails.
5.
Get Catastrophic Liability Coverage
Protect yourself from financial losses that would permanently
derail your financial strategy. Once a year, reassess
and make sure that you are protected from loss of income
to your family (life insurance), medical trauma (health
insurance) and damage to your most important asset (homeowners’
or renters’ insurance). “Generally, high-deductible
policies with low rates protect from catastrophic events
while keeping the monthly burden low.”
These
fundamental steps will pave the way to a financially
fit life that suits your personal goals. Once you come
up with your personal financial strategy, stick with
it. It is only the start of a lifelong marathon to develop
your financial game plan. Equally important is the discipline
required to stick to your plan.
Freedom Financial Network, LLC (www.freedomfinancialnetwork.com)
provides consumer debt resolution services through its
Freedom Debt Relief and Freedom Tax Relief divisions.
The company works for the consumer, negotiating with
creditors to lower principal balances due that can often
result in savings of up to half the amount owed. Based
in San Mateo, Calif., Freedom Financial Network serves
more than 4,000 clients nationwide and manages more
than $120 million in consumer debt, offering an alternative
to bankruptcy, credit counseling, and debt consolidation.
CONTACTS:
Brad Stroh, co-CEO
Freedom Financial Network, LLC
650-571-0961, x210
bradford@freedomdebtrelief.com
|
