Before you consider investing in any type of market, you should really take a long, hard, realistic look at your current financial situation.
Investing in the future is a good thing, but clearing up bad–or potentially bad–situations first is actually far more important.
Pull your credit report.
You should do this once each year. It is important to know what is on your report, and to clear up any negative items on your credit report as soon as possible.
If you’ve set aside $25,000 to invest (you wish!), but you have $25,000 worth of bad credit, you are better off cleaning up the credit first!
YOUR BUDGET
Budget? Huh? What’s that, you ask?
Well, if you haven’t already got one, GET ONE.
Write done all your essential monthly expenses: rent, electic, phone, car payment, gas, transportation, and so on.
Look at what you are paying out each month realistically, and get rid of expenses that are not necessary.
If you are not sure where all your money is going, try writing down everything you spend in a week, cash AND credit/debit cards.
There is nothing worse than impulse spending when you are trying to plan for your future. In the America’s Debt Diet program, at:
http://www.oprah.com/money/debtdiet/money_debtdiet_main.jhtml
talks about the “Latte Factor”: how much are you spending every day on things that you could easily sacrifice for the sake of your financial future, and that of your family?
Take the Latte Factor quiz; it is amazing how a whole bunch of ‘little things’ can really add up to one big chunk of cash, which you can use to either pay off debt, or invest.
THE DEBT DIET: STARVED FOR CASH?
How much of your money every month is going on the interest and financing on car loan payments, credit card payments, department store cards, and so on.
If you buy $100 of items, how much are you REALLY paying for them on a store card? Some credit cards have interests rates as high as 50%!
Do you even know your interest rates? Take the time to study your statements?
If not, you need to do it now. You’re going to be in for some surprises.
Do you always pay only the minimums? Is that all you can afford?
Or do you think that you’ll get away with that and invest the money in order to be able to get rich quick?
WRONG.
Take care of the credit card debt FIRST.
This article is continued in Stabilize Your Current Financial Situation First Before You Invest Part 2.
