Detox Your Finances

One thing you need to do when you resolve to get your financial ducks in a row is to know how to detox your finances. It is important to get rid of old habits, any residual money pits, or anything else that is hurting you financially so that you can move on in a financially sound manner. These steps provide a financial detox plan to get you on your way.

Steps

 * 1)  Sort out your credit and debts immediately.
 * 2) *Check your credit report. Do this, at the very least, annually. You are entitled to a free credit report once a year from each of the three major agencies.
 * 3) *Manage your credit. Don't let it manage you. Don't max out your cards just because you have a certain limit. It's more important to stay conscious of what you can afford to pay rather than relying on any illusory limit as a source of your finances. The banks want you to spend that much; it doesn't mean you have the income flow capacity to meet it regularly!
 * 4) *Manage your debt. If you are struggling, talk to your creditors. Don't ignore the problem, it will not go away on its own, it will only get worse. The sooner that you seek financial advice and support, the faster you can turn around debt problems.
 * 5) *Avoid store credit cards. Their APR (annual percentage rate) is considerably higher than a 'regular' credit card and having several cards can tempt you into thinking you have more spare cash than you actually do. Store cards also tie you down to spending at one place, regardless of whether it has the best deals or not.
 * 6)  Sort out your savings and insurance.
 * 7) *Get a decent interest level in your savings account. Work out how much you can spare from your income to place into this account and try to stick with that minimum on a regular basis. Keep checking for better savings deals and switch your money around to follow increased interest returns - internet banking makes it easier to track interest changes and change your savings approach regularly.
 * 8) *Realize that saving in a low interest savings account might not actually be the best use of your money. If you can use 100 dollars towards knocking down a high rate card or a very low rate savings account, think hard about where to use it.
 * 9) *Invest in yourself. Get some life insurance. Educate yourself about the different types of insurance and what suits you at the time. If you can't afford to make such a payment now, what makes you think your family will be able to if something happens to you? It's a priority worth sorting out in the present.
 * 10) Become actively involved in your finances.
 * 11) *Think about where the money is going, what it is doing. Don't just 'let it happen', or hope that money will come to you. Active planning, saving, and debt paying requires the investment of your time and engaged interest.
 * 12) *Undertake weekly money management tasks. It is better to spend 20 minutes a week sorting finances than to leave it all to tax time - incremental financial attention each week will save you a lot of effort and time in the long run.
 * 13)  [[Image:Online Fraud.jpg|thumb|right|180px|Fraud gets easier every day]]Watch out for fraud. There are some key things that you can do to protect yourself:
 * 14) * Destroy any unneeded receipts and statements;
 * 15) * Retain the receipts you do need (in a safe place) and compare them against credit card and other financial statements;
 * 16) * [[Image:2nd Anoniversary 13.jpg|thumb|right|181px|Don't you want to share with them?!]]Never disclose your personal information to someone on the phone, such as a cold sales call or through your email. It is crucial to remember that most of the time, your email is not secure.
 * 17) * Redirect your mail immediately when you move. If someone moves into a house behind you, they are unlikely to have the same stake that you will in safeguarding your information and will simply throw things in the trash where they can be found by others, or worse still, might be tempted to make fraudulent use of it.
 * 18) * Check your credit report periodically.
 * 19) * Remember that if a deal seems too good to be true, it probably is. Do your research and ask trusted people for advice before leaping in and spending your money.
 * 20)  Track your expenditures.
 * 21) *Do this to identify where your money is going and whether or not each expenditure is necessary or frivolous. This will allow you to build a bigger spending pattern and review what you are spending your money on. You can do this by:
 * 22) *Saving receipts (for at least as long as it will take you to note down the cost and what was covered).
 * 23) *Keeping a notebook handy that you can write down prices and purchases as they occur.
 * 24)  Think before you buy.
 * 25) *Save, then buy. Start reminding yourself often that don't have to have that item or service right now. That new computer will wait until you can save up to get a new one. Putting a $500 computer on credit now can easily cost you over a thousand dollars over the period it takes to pay it off. Write "New Computer" on an envelope and put money into it every chance you get. Hide the envelope and don't ever take money out except for the new computer.
 * 26) *Avoid impulse buying. Nothing is that important. Stores prey on consumers trying to get you to buy. That is why they are laid out the way they are and why the candy and magazines are right by the cash register.
 * 27) *Carry it around the store for a while. Quite often, you will realize that maybe you don't need it just now. Research it on the Internet to see if you can find it more cheaply, or to see if it really does do what you want it to. Maybe you can borrow someone else's rather than owning it? Think through all the options.
 * 28) *Don't buy into a brand just because you always have. With today's technology, there are alternatives to just about anything, and quite often they are less expensive. Look around and be a choosy buyer. Use buyer comparison sites before you go shopping so that you are aware of the best deals and can use this knowledge to bargain with.
 * 29) *Learn how to haggle and don't be uncomfortable about it. Bargaining is a good way of getting a fair deal.
 * 30)  Take charge of your home space.
 * 31) *Sell things that you aren't using or don't want. They are just taking up space and not giving you joy. If you can't sell it, consider donating it. Your personal environment will be a lot cleaner for it and other people can benefit from your donation.
 * 32) *Declutter your home and your life. Clean out your garage, have a yard sale, etc. Doing this will surprisingly lighten your load. It is also a good way of reminding yourself that it's easier not to bring things into the house in the first place as you'll only end up having to clean them out!
 * 33) *Look at your energy usage. Change to light bulbs that use less energy, water heating that is less energy-intensive and turn off your appliances when not in use. Simple things that can save you a lot of money in the long run.
 * 34) Take charge of your earnings.
 * 35) *Earn what you deserve. Look at your wages. Find out what the going rate is for what you are doing in your area. See what you can do to get your salary increased.
 * 36) *Increase your brand value. Yes, your brand value. See what you can do to increase your value to yourself and to your employers.
 * 37)  Balance your life and your work. Balance is very important to help you deal with day to day problems. When you are off balance with one thing, other problems will quickly follow and it can be all too easy to resort to spending as the answer to not coping with juggling many things in your life. Slow down and do a stocktake on what you need to change about the way you're living.
 * 38)  Teach your children about finances. Don't just assume that because they are kids, they shouldn't have to think about how to budget and how to delay desires for instant gratification. The bad habits they start now will stay with them; equally, teaching them good habits will be life-lasting too.

Tips

 * Avoid blurring wants and needs. It is important to focus on the things you need first and be very conscious about fulfilling your wants.
 * Visit a free credit counselor in your area for financial and budgetary advice and counseling. These can be especially helpful if you feel you are in over your head.
 * If you have a lot of debt from credit cards, personal loans, payday or car title loans or medical bills, you may want to consult an attorney about bankruptcy.
 * AnnualCreditReport.com provides consumers with the secure means to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act (FACT Act). AnnualCreditReport.com offers consumers a fast and convenient way to request, view and print their credit reports in a secure Internet environment. They also provide options to request reports by telephone and by mail.

Warnings

 * There are many companies out there who will offer "free" credit services like reports and score monitoring to first-time customers. Be advised that while you may receive an initial report for free, you may be required to sign up for some kind of paid membership after your trial period is over. These reports are not directly from the credit bureaus, and they are not always accurate.
 * Stay away from companies that offer to repair your credit report or score. Many times these agencies will contest all the debts shown on your report. This process works temporarily, as creditors are required to verify debt within 30 days or it is removed from your report. At this point you will appear to have a "clean" record and the agency may collect a hefty fee from you. When the creditors do get around to verifying your debt, it will simply be added to your report again.
 * Credit bureaus do not maintain reporting agencies. There is only one agency maintained, an which deals directly with the bureaus. This site deals with both the FTC and the credit bureaus.
 * None of the advertised credit offers have accurate reporting from the credit bureaus.

Related Tips and Steps

 * How to Make Your Business Life Easier
 * How to Do Your Own Financial Planning
 * How to Create an Excel Financial Calculator
 * How to Survive a Personal Financial Crisis
 * How to Cope With Loss of Financial Independence in a Relationship
 * How to Use Personal Financial Management Software
 * How to Protect Your Financial Assets

Sources and Citations

 * The ideas and concept for this article comes from "Detox Your Finances" by John Middleton.