Want your personal budget in order? Here are tips to help you reach your financial freedom in 2012

SOUTHFIELD, Mich. (WXYZ) - Many people are resolving to get their ducks in a row financially this year.  They’re sick of always having more money going out versus what’s coming in.

So, to help get our financial house in order in 2012, Action News talked with GreenPath Debt Solutions .  It’s a non-profit organization which helps consumers with credit card debt, housing debt, bankruptcy, and more.

HOLD A FAMILY MEETING

GreenPath counselors said the first step to financial success in 2012 is to hold a family meeting.

"The first thing is to get everybody on the same page,” said Rus Halsey, Director of Operations at GreenPath Debt Solutions in Southfield.

 

“If it’s just the parents pulling in the one direction, and the kids don’t understand the ‘why,’ then they don’t get the buy-in,” he added.

Children can help save the family money by simply turning off lights when they are not in use and monitoring cell phone usage and charges.  Every little bit of savings adds up.

LIST YOUR GOALS

Halsey said the next step is to brainstorm your short and long-term goals.

Short-term goals are those within the next three to six months – like a vacation.

Long-term goals are those you want to reach within the next few year s -- like replacing a car or saving for a college education.

MAKE A BUDGET

Next, make a projected budget.  Break down your monthly expenses in to different categories – groceries, clothing, entertainment, dining out, etc.

“Really look at the different type of expenses -- the on-going ones and the quartely ones,” said Halsey.

 

GreenPath.org has a lot of free tools , calculators, and spread sheets to help you set up a budget and track your expenses.

 

LOOK AT RECEIPTS TOGETHER

Halsey said the work’s not over after coming up with a budget.  He said it is very important to keep receipts and evaluate them.

“People tend to spend ten to twenty percent over than what they anticipated,” said Halsey.

By looking at the receipts together, it helps you to identify areas to adjust or cut back.

START CUTTING BACK

Finally, make the cutbacks.

This is the hardest part of the process, but it is the part that produces results.

You should see your financial health improve within the first 60 days.

“Think of areas that you feel you can cut back on and identify how much you can cut back by,”
 said Halsey.  “Make sure to stay realistic with this and do not cut out everything.  Gradually make these changes to keep yourself motivated and excited.”

“Maybe cut back on that extra coffee you get on the way to work,” said Halsey.

KEEP TRACK

You have to bite the bullet and keep track of your efforts.

Use a notebook and compare at the end of the month.  Any money that was saved possibly put in a family bank account.  Each month, have another family meeting and celebrate your success by doing something fun together as a family.

“This celebration does not have to be expensive.  It could be renting a video and having ‘Movie Night,’” said Halsey.

The more you succeed, the easier it gets. 

You can find some free tools to help you on GreenPath’s website.