What To Do To Secure Your Financial Future

If you want to secure your financial future, you must take action. If your finances aren’t what you want them to be, and you don’t do anything different, how do you expect them to improve?

Suze Orman says, “There is to be no curling up in a fetal position on the couch in 2009 hoping that when you emerge the crisis will have passed. No assuming that there is a government bailout or Wall Street rally right around the corner that will fix everything for you without any effort on your part. You will have to get off the couch and take control of your financial life in 2009.”

Suze has published a free downloadable book to give you an action plan for 2009. You can download it here. If you prefer a printed copy since this is a 227 page book, go to this link Suze Orman’s 2009 Action Plan.

I have to disagree with one of her action items though. She says that if your credit score is above 720 and your interest rate just shot up, that you should do a balance transfer to a lower rate card. I think this would be a good second choice. The first thing you should do is call the credit card company and negotiate a better rate with them. If they will not lower your interest rate when you have been a good customer and you have a good credit score, then it is time to find another company.

Reducing Your Debt

The book contains great advice for why you should avoid debt consolidation companies that will reduce the amount you owe by “repairing your credit.” If they are settling with your credit card companies for a lesser amount, not only will your FICO score be in the trash, and not only are you paying them a fee, but you could be liable for taxes on the amount that they reduce your credit. There is no easy way out of debt.

So how do you pay down your debt when you are already struggling? The section on how to “find” more money to pay down your credit debt is excellent. Of course, you can’t save money and pay down debt if you don’t know where you are spending your money. If you don’t have a budget, start one now with easy to use software. Starting a budget is easy with Money Tree Personal Budgeting Software. As Suze says, “2009 is about making the right and honest choices to build a secure future. And what is right is not always the same as what is easy.”

The financial experts are warning that you can’t say the economy is getting better just because the stock market rallies for a few days. A rally is expected in the stock market when Barack Obama is inaugurated. But don’t get a warm fuzzy feeling yet. It will not last, because the problems that were years in the making, will not be resolved overnight.

What About Retirement?

Suze has a whole chapter of information on how to handle your retirement accounts whether you are 25 or 65. She also recommends that you build up your savings to cover eight months of living expenses. The rule of thumb used to be three months, and for a while now it has been recommended to have at least six months of living expenses. This is the first time that I have seen eight months. That is a lot of money, but it makes good sense. When everyone is job scared and multitudes have already been laid off, it may take many months for you to find a new job if you are laid off or your company goes bankrupt. So even if it takes you a few years to get there, get started saving now.

What About Real Estate?

Whether you are looking at investing, have an adjustable rate mortgage (ARM) or facing foreclosure, Suze covers many aspects of real estate and mortgages. Many banks are cutting HELOC loans,- home equity lines of credit, because of the fall in the value of homes. So if you are using a HELOC as a safety net or were expecting to fund your children’s college, you need a new plan. Besides, you don’t want to put your house on the line, especially during a recession when you have an increased risk of losing your job.

Although Suze’s advice is very good, she says that foreclosure is not a permanent stain. I don’t agree. Although your credit will improve in seven years, every time you try to purchase a house you will have to disclose that you have been through a foreclosure in the past, even if it has been longer than 7 years. This doesn’t mean that you won’t be able to buy a house, but you will have to go through the pain of explaining the circumstances.

What To Do Now

If you don’t have a budget, start one now with easy to use software. Starting a budget is easy with Money Tree Personal Budgeting Software. Then take action and get Suze Orman’s 2009 Action Planbook and read it. She will help you recognize just how much is within your control, and show you that you can change your future for the better.