Give Your Wallet a Workout

If you are like most people, your resolutions for 2007 include improving your waistline and your bottom line. However, getting your finances into good form is oftentimes more arduous and time consuming than losing those unwanted holiday pounds. To help get your wallet into shape, the experts at Money Management International suggest the following financial workout:

Exercise 1: Perform a check-up
To find out where your hard-earned money is going, start by listing your monthly, fixed expenses, such as rent or mortgage, utilities, insurance, loan payments, and minimum credit card payments. Include every monthly bill, estimating those that are variable, such as the amount you spend every month on groceries and gas.

Exercise 2: Trim the fat
If your budget is packed with unnecessary expenses, it is time to take control. Make very clear, conscious decisions about what is important to you and your family, and eliminate the rest. Start carrying a pocket-sized spiral notebook with you at all times, and write down every purchase you make and its cost. Even if it is only a soft drink from the convenience store, or a trip to the drive-thru at a fast food restaurant, record it in your notebook. Most people discover that this exercise curbs spending automatically because it draws their attention to it. After two weeks, review your notes and eliminate the purchases that are unnecessary or in excess.

Exercise 3: Kick a habit
If you habitually carry high balances on your credit cards, make a resolution to pay down your debt. Reducing your debt allows you the freedom to make smart financial choices. Start by focusing on your debt with the highest interest rate, but do not forget to make required payments on all debts. Once that debt is paid off, apply that amount to your card with the next highest interest rate. If this task seems impossible, you might also consider paying off your smallest balance first; seeing quick progress is often a good motivator.

Finally, keep in mind that reviewing your credit reports annually is a healthy financial habit. The Fair Credit Transactions Act grants consumers one free copy of their credit report annually from each of the three major credit bureaus. Visit www.annualcreditreport.comto get your free reports.