I was blogging around today and stumbled up on this easy to read, easy to make sense article on financially turning around.  And thought I would pass it along.

How many of you all actually have an emergancy fund?  I personally have different ones like a vacation fund, and college funds, but I never have created an emergancy fund. Probably something I should at in the near future, and perhaps my Visa wouldn’t take such a beating. LOL.

Anyhow the following Article is from  The Simple Dollar and can be read in full here.

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Whenever you go to buy anything, give yourself ten seconds to ask whether you actually need it or not. I call this the ten second rule, and it’s helped me countless times. Spend those ten seconds trying to convince yourself not to buy the item. In the end, you’ll begin to train yourself to spend less and less by peeling out the stuff that you don’t authentically need.

Wait thirty days (at least) before any major purchase. I define “major” as being any purchase that costs more than, say, $20. Almost always, such purchases deserve more thought, and quite often you’re making that purchase in the heat of the moment. Put the item back on the shelf instead and wait thirty days on it. Likely, you won’t even remember it in thirty days, and if you do, the odds are you will have realized that you didn’t really need it after all.

Keep track of every single dime you spend for two months. Everything. Then, when you’ve got two months’ worth of information, try to categorize that spending by groups that make sense to you. Lots of budgeting books offer categories, but it usually works better to define your own - things like eating out, music, video games, groceries, and so on. When you know how much you spend over two months in each category, you’ll usually quickly see some things that need to change. This is budgeting.

Set some short term goals - a week or a month worth at a time. Make it your goal to cut in half the amount of money you spend eating out. Make it your goal to not shop this month for solely social reasons. Make it your goal to spend $100 less than you earn this month. State it clearly and don’t forget about it! Put a reminder of that goal somewhere where you’ll see it and think about it often.

Start an emergency fund - and make it automatic. I talk about emergency funds all the time. It’s because they’re invaluable, and I’m shocked how often people don’t have them. An emergency fund is a savings account that contains enough cash so that you can immediately and easily handle most emergencies in your life - the more you have, the more protected you are from disaster. Yet, for many people, it’s hard to find the money to set one up. The best solution I’ve found is to get an online savings account, like one through ING Direct (which is what I use), and set that account to automatically pull a small amount from your primary checking each week - say, $20. Then, if your car breaks down six months later, it’s not panic time. You just go to your emergency savings account, pull out that $500 you have saved up, and the problem is solved. The real key is automating it.

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