Guest Author - Guido Deboeck

Spring is here! Temperatures are increasing; the sun is out more; and with it comes spring fever, an urge to start cleaning! Your house, garage, or even your office could benefit from some serious cleaning (at least mine do). So do your home finances. Before you get spring fever consider these simple steps to clean up your home finance and to get ready to start investing:

1. Get rid of credit card and consumer debt
One of the best investments you can make is to reduce or eliminate your consumer debt. Rates on credit card debt, car loans, home equity loans and the like are very steep. R. Cliett wrote: “if you are serious about taking control of your finances, then you must analyze your credit card debt and create a master plan to reduce the balances”. Follow her master plan and reduce those credit card balances

2. Track your household expenses and make a budget
If you are not yet tracking your household expenses, start now. Put together a simple list of household expenditures categories, enter them in the first column of a spreadsheet, and label the other columns the months of the year. Keep all receipts and enter monthly the totals of your household expenditures for each category (e.g. house maintenance, insurance, food, drinks, travel, vacations, education, health, beauty and the like) into your spreadsheet. After a few months you will be amazed to see the subtotals for each category, This will provide you with trends, information on your present financial situation and ideas as to how to save.

3. Make monthly contributions to a savings account
Do not treat savings as the balance between your income and all your household expenditures for the year. If you are spending what you earn, make an effort to cut back in certain areas. When you find extra money, make it a habit of paying yourself first by putting the money into your savings account. Saving money means putting a portion of your money away for emergencies but also invest some portion wisely to achieve a decent return. The easiest way to be prepared for emergencies is to open a regular savings account. The best way to achieve a decent return is to invest part of your savings in the stock markets.

4. Open an on-line brokerage account
You can keep a savings account in your bank, but money kept in a savings account will not produce a good return. Open a brokerage account that allows both to save and to make on-line investments. Once you have a savings account in a bank and a on-line investment account with a brokerage firm, setup a mechanism that automatically transfers from savings into your investment account on a monthly basis. For example, transfer monthly all savings above a certain amount into your investment account.

5. Educate yourself about investing
Do not postpone learning about investing. As you read elsewhere on this site to learn to invest takes time. Most important of all learning to invest requires that you focus on learning the basics , practice, and potentially attend an investment workshop. Assemble the essential tools for investing and learn the ten important rules for investing.

6. Start small but without further delay…
This spring after you have done all the above start investing. Start small but without delay when the market is favorable. Do not postpone learning essential skills, get in control of your financial situation, and over time improve your standard of living, your well-being. There is no greater satisfaction or feeling than to increase your financial independence.