Enjoy Financial Independence This Fourth of July

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Texas CPAs Offer Ways to Maintain a Budget and Reduce Credit Card Debt

As we celebrate our nation’s independence this week, the Texas Society of CPAs (TSCPA) encourages you to also think about taking steps to achieve your financial independence. Set attainable goals for yourself and your family like creating a household budget to maintain spending and saving, or break free from pesky credit card debt. Whatever financial obstacle you choose to overcome, take time this month to plan your path to financial freedom.

Simple Budgeting Tips

  •     Track your spending: For one month, keep receipts and/or write down all purchases to have a good idea of where the money goes.
  •     Know your income: Make a list of all income sources like salary, rental properties, gifts, dividends, etc.
  •     Set saving and spending categories: List all fixed expenses like the mortgage and uncontrolled variable expenses like utility bills. Controllable variable expenses like food and entertainment are more flexible. Use a month-long tracking exercise to help assign a dollar amount to each variable expense. Then, add it up.
  •     Compare income and expenses, and make adjustments if necessary: If income exceeds expenses, you’re in good shape. If expenses are more than income, adjustments need to be made.
  •     Stick to it: To get spending under control, stick to the budget. This doesn’t mean not to have any fun; factor entertainment expenses into your budget. The most important thing is sticking to it!

Cutting Credit Card Debt

  •     Know how much is owed and to whom: Getting out of debt is possible and one of the first steps is to know how much you owe. Make a list of debts, including interest rates and minimum payments.
  •     Target balances with the highest annual percentage rates: Once one credit card is paid off, keep making payments to pay other remaining credit card balances.
  •     Pay more than the minimum due: Even if it’s just a small amount, it will help avoid paying for an item several times over in interest.
  •     Use a debit card to avoid interest charges: It works like a credit card, but automatically deducts the purchase price from a checking account.
  •     Restructure your debt: Consider switching credit card balances to a card with lower interest.
  •     Protect your credit history: Make all loan and credit card payments on time.

Stop by TSCPA’s noncommercial financial literacy website, http://www.ValueYourMoney.org, for personal finance information broken down into various life stages. Let us know what goal(s) you and your family plan to work toward this month and throughout the year! Declare your financial independence on the ValueYourMoney.org homepage.

TSCPA (http://www.tscpa.org) is a nonprofit, voluntary, professional organization representing Texas CPAs. The society has 20 local chapters statewide and more than 27,000 members, one of the largest in-state memberships of any state CPA society in the United States. TSCPA is committed to serving the public interest with programs that advance the highest standards of ethics and practice within the CPA profession.

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Avery Elander
Texas Society of CPAs
+1 (972) 687-8688
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