Teach Middle East Magazine Issue 1 Volume 3 Sep-Oct 2015 | Page 49

Finance 6. Make a will Making a will is especially important if you have children. It enables you to name guardians to watch over them. A last will is also critical if you own significant or complicated assets. 7. Create a budget and stick to it Creating a budget is a critical step in getting your finances in order and it’s not difficult to do. Sticking to it is another matter! In a notebook or spread-sheet, write down all your fixed monthly expenses. Next, write down your other “non-fixed” expenses such as meals out, entertainment, clothing, and other discretionary purchases. Writing it down and seeing it on paper helps you to understand where your money goes each month and where you can cut back. Once you’ve made a budget, you have to stick to it. Every time you buy something, write down the amount and what you bought. Compare your actual spending to your budget to see where you’re getting off track. You can also check out budgeting and expense-tracking software like Microsoft Money. 8. Reduce your de bt Another difficult-but-necessary step in getting your finances in order is consolidating and paying down debt. You should pay at least double the minimum payment plus the finance charge every month. Transfer balances to one or two cards with low APRs to help you keep track of credit card debt. Destroy or freeze your other credit cards, so you don’t use them. Use cash or debit cards instead of credit for all purchases. If you don’t have the cash on hand, don’t buy it. 9. Set up an emergency fund We all know the importance of having 2 to 3 months of income on hand in case of emergency, but in tight economic times, it can be difficult to do. If you’re really short on cash, try putting every 20aed bill you get into a box, or even emptying all your change into a jar at the end of the day. Tricks like these do work and they will add up over time. Better yet, write yourself a check, even if it’s only 100aed every time you get paid and place it in a special account. Another alternative is to take a chunk of money out of your savings and invest it in a Certificate of Deposit (CD) with a penalty for early withdrawal. 10. Safekeeping for financial documents Finally, real estate deeds, trusts, wills, 401ks, IRAs, and other important financial documents should be kept in a safe place that a trusted friend, attorney, or family member knows about. Also make copies of driver’s licenses, passports, and credit cards in case of loss. After The Bell | | Sep - Oct 2015 | 47