Debt Consolidation
Consolidation Loans
Building a Budget that Works

We all know what a budget is and why it's important. But creating one that succeeds is not so simple. First, get help. Investing in good budget-tracking software is invaluable when it comes to managing your family's finances. Here are some more suggestions for sorting out your expenses.
  1. Get organized. Use the tools in your financial software to schedule and set calendar reminders for known expenses. This will help you incorporate other expenditures into your overall plan.
  2. Be proactive. Online payments save time and help make a manageable system. The fewer last minute surprises, the more likely you are to succeed.
  3. Be realistic. Your "must do" expenses such as taxes, rent, groceries and insurance, will probably account for 60 percent of your total income. (Perhaps a little higher or lower.) Don't forget to include the less obvious expenses such as music lessons for a child or gifts you need to buy.
  4. Prepare for the unexpected. Set aside 10 percent of your income to cover irregular expenses, such as car repairs, replacement for a broken washing machine, or patching a hole in your roof. Deposit this money into a separate savings account and withdraw it only when needed.
  5. Save for major purchases. Put aside another 10 percent in either a money market account or a certificate of deposit, which pay higher interest. Buying a new car, couch, or furnace with cash can save hundreds of dollars in interest.
  6. Don't forget the future. Another 10 percent goes directly into an IRA, 401(K), or similar tax-deferred retirement account. Or, if you have debts, put five percent in a retirement account and use the remaining five percent to pay down your debt.
  7. Reward yourself. The final 10 percent is "fun money." It's yours to spend on life's little extras, such as dining out and entertainment.

Research by Ronnie Brooks and Cleo Hayes,
undergraduate students,
University of Memphis

• Bankruptcy filings in Memphis for 2002: 28,207

• 75% of bankruptcies filed in Memphis are Chapter 13.

• 2002 - The Commercial Appeal publishes a story stating personal bankruptcy filings in West Tennessee have increased 22% over the prior 12 months.

• 2001 - The New York Times prints article proclaiming "Memphis is the Bankruptcy Capital of the Nation".

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