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Here are a few tips to help you out in these uncertain financial times.

Check Your Lines – Some years ago I was fishing for bass and had tossed out my line shortly after arriving at the shore. I waited for hours for a bass to bite. By the end of the night the line hadn’t even jerked once. Yet, when I reeled in my line to go home, I had a giant sunfish on the end of it. I had sat all night not knowing what was on the end of my line. Well most of us have fish on our lines, we just don’t know it. Our closets are full of things we have forgotten, things we spent a considerable amount of money on a long time ago. Sell those things you don’t want or need anymore.

Give Yourself a Raise – Most people think that the key to financial freedom is getting a raise or a job that pays more. That certainly is one way. However, there is another way that most people overlook. You can give yourself a raise by paying off a loan you currently have. Let’s say you pay off your car loan. Well, that’s three hundred dollars a month more you are going to have in your paycheck to use how you want. Start targeting your loans. Pay them off quicker than the term of the loan.

Sitting Savings – Most working Americans have at least a thousand dollars sitting in a savings or checking account that they do not collect any interest on. Reallocating that money to a savings account with a good interest rate can earn you enough money in a year to go out to dinner. Who would say no to a free dinner at their favorite restaurant? I certainly wouldn’t. Take the time to research better accounts or banks that will make your money work for you.

Savings vs. Interest – Now that I have encouraged you to put your savings to work, I also am going to tell you to spend your savings, but for a good reason. A reasonable safety fund in a good interest bearing account is good as I mentioned above. However, the interest rate on a loans is often more than the interest rate on savings accounts. This means that if you have a loan with a 5% interest rate, it is better to pay it off than put away money in a savings account that is earning 2%. There is no sense earning interst at 2% when you are losing it at 5%. Pay off that loan first.

Know What You Earn - One trap some people can fall into is spending more than they earn. It’s not that they consciously try to, it is often because they don’t realize they are spending more than they earn. For most it is because they don’t keep track of how much money is coming in and how much is going out. Test yourself. Write down everything you spend your money on for the next two weeks. You will be surprised at how much money spend. And don’t forget to add in the bills that only come once or twice a year, like Christmas or that car insurance payments. Forgetting to add those in can fool some into thinking they have more money to spend than they do.

© Seth Crossman