REDMOND, Wash., Dec. 16, 1999 — With a booming economy and personal incomes rising at the fastest pace since 1994, it seems like everybody should be living on easy street these days. But a more realistic side of the story is that credit card debt is still dangerously high for most people, and too many of them don’t spend wisely, save enough or invest for the future.
According to the U.S. Commerce Department, personal income rose 0.7 percent in June, the highest percentage this year, while personal spending also jumped 0.3 percent before the holiday shopping spree even started. Yet personal savings is the lowest it’s been in years.
So if you’re making a New Year’s resolution to gain financial freedom in 2000, financial expert Tod Barnhart recommends breaking this daunting task into three manageable steps. First, figure out where your cash is going. You’ll probably be surprised by how much is being spent on things you don’t need. Next, get out of debt by paying off your credit cards and saving a little money each month. Finally, set long-term financial goals based on purchases you want to make in the future, and create a savings and investment plan based on those goals. Among the many tools to help you stay on track is personal finance software, such as Microsoft® Money 2000 Deluxe, which can be like your own professional financial adviser – without the fees.
“Getting a handle on where your money is going helps you immediately discover your net worth and puts you in control of your finances,” says Barnhart, who heads his own multimillion-dollar investment advisory firm and has written two best-selling books: “The Five Rituals of Wealth” and “A Kick in the Assets.” “Get started by recording everything you spend each day. You’ll be shocked how quickly little things can add up.”
Recording all your purchases is the first step to getting control of your debt, but it takes time and diligence. Rather than writing down every purchase in a spiral notebook or legal ledger that you will probably never maintain, try your hand at personal finance software, which allows you to quickly and easily record and track purchases.
“Another essential step to financial freedom is to pay off those credit cards and stop using them,” Barnhart says. “Paying with cash or debit cards allows you to spend only what you can afford, when you can afford it and eliminates those hefty interest penalties. So pay off those high balances and begin to pay yourself 10 percent of every paycheck. Why pay the credit card companies each month when you can pay yourself?”
No matter what percentage of your paycheck you put aside, it is important to get started on a savings plan and to be diligent about it. One easy way to ensure that you are saving is to immediately put aside money for savings each month when you pay bills. This money should be invested someplace that will be difficult to access. Money 2000 Deluxe will actually help you research savings plans and investment opportunities on the MSN TM MoneyCentral TM personal online financial service ( http://moneycentral.MSN.com/ ). In a few months, that big-ticket item may be closer than you think.
Once you get the hang of it, use Money 2000 to act as your virtual finance manager. Investment tips, stock plans, financial tracking and progress, and “what if” scenarios are just a few more tools this software offers even the novice financier.
Money 2000 Deluxe is available at stores nationwide for an estimated retail price of $64.95. All versions of Microsoft Money are year-2000 compliant. Detailed information on year-2000 compliance for Money and other Microsoft products can be found at http://www.microsoft.com/technet/year2k/product/user_list.asp.
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