Making plans to purchase a new home or even to make a move up requires financial planning. Here are some tips:

1. Make a plan. Create a straightforward budget for the year and monitor it monthly or weekly. Each month, review your progress and revise where necessary. Make a date with yourself or your significant other each month and make it mandatory.  Come prepared with updated records.

2. Use cash. This is probably the single biggest idea to start creating wealth!  Move away from credit cards and avoid going into debt, especially for daily, routine and ongoing purchases. Write checks or use automatic bill payments for bills, and withdraw enough cash or use a debit card for other expenses. Track withdrawals diligently to avoid going into overdraft. It's hard to do but after a year you will find it very easy, and your credit cards will no longer be a drain!

3. Pay bills on time. This sounds like a 'no brainer' but in this economic climate you need as perfect credit as you can to buy a home, and just being late one time on your rent or mortgage will keep you from buying another house. The most important element of good credit is paying bills on time. Keep bills in one location and check that spot weekly. Set up online payments or write due dates on a calendar to stay on track.

4. Save and then Save some more!  Your goal should be to save 10% or more of your income, but starting with even a few dollars a week is a great way to develop the habit of saving. You can always add more to your savings at any time. For example, after you pay off a bill, add the amount you would normally pay toward the bill to your savings instead. If you get a raise, bonus, cash gift or other one-time monetary receipt, save it—or at least a portion of it. Skip eating out one day a week. 

5. Practice preventative health. Case in point: my brother knew something was wrong with his foot but just kept putting off going to the doctor - until he got really sick and was running a fever.  Come out to find, he had diabetes and ended up with a toe amputated - just because he refused to take the time to go to a doctor.  Money cannot buy good health, but in today’s world of skyrocketing medical and insurance costs, getting sick can cost you. Exercise and eat well, get enough sleep and, in these stressful times, take time to pursue relaxation practices, whether that means spiritual practices, meditation, a workout or coffee with a friend.

6. Think twice before spending. Find creative ways to cut back on expenses—take care of household maintenance, barter services or goods with friends or neighbors, and fix up old belongings rather than rushing to buy new ones. Some statistics say that people buy 30% more when shopping with a larger cart, so even a small change like avoiding the store cart when possible could save you money. Once you go to an all cash plan this is easier to control.

7. Participate in a retirement plan. Many believe now is a great time to invest for the long term. Especially if your employer matches contributions, contribute to a business retirement plan. If you are on your own for retirement savings, invest in an Individual IRA, Roth IRA and/or plan for self-employed persons.

8. Have the right insurance. Insurance protects against expenses you cannot cover yourself. Be sure you have life insurance to protect your family, auto insurance to cover your car, health insurance to provide for at least major medical incidents, and home or renter's insurance to protect possessions from theft or disaster. Remember, the insurance company doesn't want to pay you so you have to be very persistent when you are due - but don't use it unless you absolutely have to - your rates will probably be raised if you use it a lot.

9. Pay taxes on time. File your income tax return on or before April 15, with any tax due, to avoid penalties. At the same time, adjust withholding if needed to account for changes in income. That step might be especially important this year for those with lost or reduced work. If your refund was large, have fewer taxes withheld so you are not giving an interest-free loan to the government.

10. Get help if you need it. If you lose your job, file for unemployment quickly. If you are worried that you will be unable to pay rent, mortgage or other obligations, talk to your bank or a reputable debt resolution company to learn about your options.

Investing in a home one of the best ways to secure your financial well being. If you would like more information, e-mail me, and please forward these sound financial tips to your family and friends.

Leslie Green, (225) 202-7935, leslie@patwattam.com

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