Get Back on the Financial Track

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For many Americans, the last few years have been a challenge.  You might still be unemployed or just starting to get back to work after a long period of joblessness.  Or maybe you put yourself in financial turmoil by using the credit card too much and wiped out your savings.  Even if you have a good job, you might be overburdened with student loan debt and it is preventing you from getting ahead.  Regardless of the barriers that you have faced, recognize through proper planning and discipline that you can get back on track to the road to prosperity.

Obviously, one needs to earn steady income to be financially stable.  Therefore, it is imperative that you find employment that best matches your skill set.  If you have been out of work for awhile, then your ‘new job’ will be looking for a job.  Rather than just filling out applications over the internet, broaden your job search through expanding your network.  This means reaching out to friends and family about the type of job that you are looking for.  It also means putting through the legwork in getting your name and credentials through various avenues, including civic organizations and local establishments to put a ‘face’ to a resume.

Utilize your state and local Department of Labor resources to enhance your job marketability.  They offer career assessment and job seeking tips that can be helpful in improving your job search.  You might want to consider volunteer opportunities in your career field where you can show off your skills.  Even though it is unpaid, this is an opportunity to find your niche and connect with people that can guide you on a more lucrative career path.  Also, it will prevent your skills from declining through rust.

After finding a stable source of income, you can now plan for financial prosperity.  That entails developing a list of financial goals and devising methods to meet those goals.  Regardless of circumstances, it is imperative that you take action as soon as possible.  Realize that success or lack of success will bear consequences for not only yourself, but future generations.

Adjust your lifestyle to live beneath your means.  Of course, there are necessities, such as paying rent or a mortgage.  However, examine other expenditures.  You might want to consider adjusting or eliminating your cable and phone subscriptions.  Plan ahead by purchasing clothes in the off-season.  If there is a large ticket item that you must have, then plan to buy it within six months rather than right now.

It is imperative that you plan for emergency savings.  Take your savings and divide it by your monthly expenses, which is called the liquidity ratio.  Shoot for at least a ratio of 2, though 3 is ideal.

Once that is accomplished, you can now move on to more lucrative investments.  Find out of your employer provides a defined-contribution retirement plan where you can make pretax contributions and your employer matches a portion of it.  If so, then definitely take advantage of that.  If you are relatively young, consider purchasing an IRA.  Its advantage is that it is tax-deferred and is one way to limit your current tax liability.

Sweat the small stuff.  Have you ever done any impulse buying when visiting the mall or grocery store?  If so, refrain from doing so and establish a plan where you stick to it.  You might want to create an envelope system where you record budgeted amounts for certain expenditure categories, food, transportation, and entertainment.  Place the budgeted amount of cash in each envelope and record each expenditure on the envelope.  When funds are exhausted from the envelope, then no more money can be spent in that area.  Of course, this system will require placing it in a secure place, such as a safe-deposit box.

While you might be derailed today, follow these principles and tomorrow you will be back on the financial track.


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