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Many people find it difficult to keep their spending under control. Others struggle to stretch their paycheck enough to meet current expenses while paying off existing debt. If you need help keeping your personal finances in check, the following financial planning tips will help you regain control.

Valuable Financial Planning Suggestions

1. Prioritize an Emergency Fund

Many people go into debt because of unexpected expenses, such as medical costs or car repairs. To avoid that, create an emergency fund in which you save a portion of your income each month until you accumulate enough to last three to six months. Give up nonessentials, if you must, until you have a nest egg to help you pay for unexpected costs. It will also support you during a job search if you suddenly become unemployed.

2. Create a Budget

Financial PlanningA budget need not be complicated; calculate your monthly household income, subtract nonnegotiable expenses like rent and car payments—including your emergency fund deposits—and figure out how much discretionary spending you have left over each month. Divide this up however you like and track spending as closely or loosely as you want. However, the more closely you monitor it, the more information you glean, and the easier it is to adjust spending habits.

3. Pay Off High-Interest Debt

Make minimum payments on all other cards and loans, and maximize payments on the most expensive one. Once this is paid off, roll that payment amount over to the next highest. Keep doing this until you are debt-free. Then, since you have grown accustomed to living without this amount as discretionary income, keep doing so. Direct the same amount into a long-term savings or retirement account.

 

For professional financial planning assistance, contact the experts at Hannegan & Associates, a firm of certified public accountants in Edgewood, KY. They have served Greater Cincinnati for nearly 10 years, specializing in bookkeeping, accounting, payroll services, tax preparation, and estate planning. Visit their website to learn more about their personal financial planning services, and call (859) 291-0101 to arrange a consultation.

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