How to Get "Unbroke"

One of the greatest satisfactions in life is having a sense of control over your finances. The best way to become “unbroke” in the current economy is to become financially aware. Financial awareness is defined as understanding where you are, where you want to go and what you want to do with your money. We must realize that successful money management is an ongoing process. There are 5 basic steps to become “unbroke” in a recession and I am going to walk you through them.

The first step is to assess your financial situation. You have to ask yourself hard questions like, “do I pay my bills on time?” You have to put into perspective how much time you put into planning ahead for large expenses or how much in savings you are putting away each month into savings. This step allows you to fulfill the first requirement of becoming financially aware. You have to know where you are at. From there you will be able to figure out where you want to go.

The second step is to set financial goals. Financial goals establish where you want to go. Most people in the current economy want to get out from under their mounting debt. They want to get from being upside down on their mortgages. A more realistic approach would be to start a little smaller. Once you figure out what your current financial situation is you can then set financial goals to mark the path of where you want to go. The key to this step is to write your goals down!

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The third step is to analyze debt. In order to know what you are going to do with your money it will help a great deal to know what you are doing with it already. The most universal way to complete this step would be to use percentages. You should try to save 10% of your net income on a monthly basis. You should limit your mortgage/rent debt to less than 1/3 of your gross monthly income. I realize this is not the easiest thing to do so with that I will say that these universal percentages can be used as guides when setting your goals. You need to analyze where you are with your debt to figure out where you want to go with your money.

These steps may seem basic or trivial but in order to implement them you must start paying attention. You have to be realistic and take stock. If you are in a bad financial situation ask yourself how you got there. If your situation is not so bad immediately set goals to make it better. I realize the title of this article is 5 ways to get “unbroke” in a recession but you will have to stay tuned for the last two steps.