Get Financially Fit: A Step-By-Step Plan - FOX 32 News Chicago

Get Financially Fit: A Step-By-Step Plan

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ATLANTA -

April is Financial Literacy Month, so it's time to think about getting financially fit.  Let's start with two questions.

Do you know how much you spend each month?  How much of your check should you save?  According to LearnVest, an online budget and financial planning service, a lot of folks can't answer either of these.  

So here's your first job:  Tally your spending for a month, literally, every penny that goes out.  I've done it. It's a rude awaking.  I realized I eat out too much.  This will also highlight your weak spot.    

Next, put your spending into categories by using the 50-20-30 rule.  According to Oxygen Financial in Atlanta, 50 percent of your take-home pay should be dedicated to essential expenses like housing, transportation, utilities, groceries and childcare.

Thirty percent of your check goes to what is called lifestyle choices like cable, cell phones and eating out. This is the one that often needs to be pared down a bit to stay on budget.

Finally, the folks at Oxygen Financial say savings and retirement should be at least 20 percent of your paycheck.  We're talking here about retirement and college savings and emergency funds.

And that brings us to another rule:  Pay yourself first.  But that doesn't mean making sure you set aside fun money first. Pay yourself first means putting that 20 percent away for savings first then divvying up the rest for bills.  Then, what's left is your fun money.  

Once you've done this attack your debt.  Take some of that fun money and pour it into paying off credit card debt.   Another piece of advice from Atlanta's Oxygen Financial is to dip into savings if you have to help get rid of credit card debt. It's that important.

Here are several online financial planning services that can get you started.  Happy saving!

www.BudgetPulse.com
www.feedthepig.org

www.learnvest.com
www.levelmoney.com
www.mint.com
www.mvelopes.com
www.payoff.com
www.ReadyforZero.com
www.yodlee.com

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