Five Easy Ways to Improve Your Finances in 2003

RELEASE: January 2003
CONTACT: Paul Richard, RFC, ICFE Executive Director

San Diego, CA. Most people need to take five common sense steps to improve their finances in order to avoid costly mistakes and even greater debt accumulation says the nonprofit Institute of Consumer Financial Education (ICFE), a San Diego based group helping consumers become better spenders, regular savers and wise users of credit.

Because more Americans are paying off short term credit card debt than ever before, developing new money management skills is an essential part of the process of debt elimination, said ICFE executive director, Paul Richard, a registered financial consultant (RFC).

Developing financial self-discipline is the consumers best defense, even in a soft economy, to avoid compounding past mistakes and improving finances in 2003 says Richard. Here are five steps to take:

1. Keep your financial know-how current in order to be in a position to make intelligent spending and other financial decisions. Being aware of changes in the tax laws, investment returns, etc. helps one avoid becoming overconfident and unprepared.

2. Project your income and expenses for the next twelve months and then track the variances. Developing a spending-plan, a/k/a budget, promotes better spending decisions. Spend money thinking of your future as well as your present. You have an obligation to be as good to the person you are going to be in 20, 30 or 40 years from now as you are to yourself today.

3. When investing, focus on the relationship between the risk and the projected return of your investments. Many investors overlook the possibility of not getting their basic investment back because they are focusing on early, high-end returns. Have a plan and a purpose for your investing. Focus on making good decisions rather than beating out a real or an imagined opponent in the stock market or in real estate.

4. Maintain well organized records for income tax and general financial planning purposes. This is often as easy as having twelve envelopes, one for each month, and placing all pertinent financial statements, receipts etc. into an envelope monthly and then placing the monthly envelopes in a larger, yearly envelope.

5. Manage your money so expenses stay below income. Everyday spending decisions, especially credit based one, will have a far greater negative effect on one's financial future than any investment decision one is likely to ever make. Household and grocery items take up about 30 cents of every take-home dollar. Using coupons and taking advantage of rebates is a way to make and immediate, positive impact on your finances.

The ICFE s Web site at has many helpful spending tips and worksheets for setting up a one-page spending plan and much, much more.

To receive the same information by mail, please send $1 and a self-addressed, 60 cent stamped envelope to:

ICFE Spending-Plans
PO Box 34070
San Diego, CA 92163.