"Financial safety requires planning."

-- H. Vanoy Barton

This Year, Resolve to Clean Your Financial House

Freedom Financial Network offers five tips for starting the New Year right

San Mateo, CA (PRWEB) January 4, 2006 -- With higher consumer prices, rising interest rates, a cooling real-estate market and ID thieves lurking around every corner, it is more important than ever to have a strong financial game plan. And because there is no time like the New Year to get your personal finances in order, Brad Stroh, co-CEO of Freedom Financial Network, LLC, suggests five tips for getting your family on solid financial footing.

1.    Know Your Goals
Sit down with your family and set both long- and short-term personal goals. You don’t want to go through life as a rudderless ship, so make sure your financial strategy is taking you somewhere you want to end up. “Whether you want to take a trip to Europe this summer, buy a home in three years, plan for impending retirement or simply go for a walk every week, the important thing is that you plan to meet these goals,” Stroh explains. Once you have your personal goals on paper, make sure your financial plan is congruent with them.

2.     Create a Budget
Managing cash flow is the foundation of a solid financial game plan. “The best way to proactively direct your cash flow is through a budget-driven personal financial strategy,” Stroh says. Based on the personal goals you wrote down, your strategy should help you become free of liabilities, accumulate assets and use your positive cash flow and assets to build a positive net worth.

Begin by detailing your ongoing monthly expenses (fixed expenses like rent or mortgage payments). Add variable expenses that are “must-buys” (food, gas, medicine), and then leave categories for savings and spending cash (for unexpected expenses and entertainment). Add your monthly net income (the amount left after taxes and other paycheck deductions such as health insurance and 401(k) contributions).

“If your bottom-line cash flow is negative or does not help you achieve your short- and long-term financial goals, do a ‘gut check’ and find a way to either increase your income or reduce your expenses,” Stroh suggests. (Note: Getting rid of credit card debt is frequently the best way to free up your free cash flow.)

3.     Make Sure Your Credit Report is Clean
You now can go to www.annualcreditreport.com and pull your free “tri-merge” (all three major reporting bureaus) credit report once a year. If you find errors or misrepresentations, send a letter directly to each agency requesting the item be corrected or removed. If the report contains negative information that is factually accurate, send a letter explaining the cause of the derogatory mark (e.g., divorce or medical hardship made it impossible to pay your credit card payments two years ago). Ask the reporting agency to append the explanatory letter to your profile. “This process will improve your future access to credit and help you get a mortgage, credit card or installment loan on terms that meet your financial strategy,” Stroh explains.

4.     Protect Yourself From ID Theft
Identity theft is at an all-time high, and most of it occurs “offline,” not through the Internet. You need to protect yourself from unscrupulous individuals who could go through your trash, steal your account numbers online or get personal information through complex “phishing” scams. First, make sure you record all important financial information and account numbers in a secure place (a “post-it” on your work computer does not qualify as secure). Next, shred all documents that have your personal information on them. Lastly, shop online only at stores you trust, and never give out personal information in e-mails.

5.     Get Catastrophic Liability Coverage
Protect yourself from financial losses that would permanently derail your financial strategy. Once a year, reassess and make sure that you are protected from loss of income to your family (life insurance), medical trauma (health insurance) and damage to your most important asset (homeowners or renters insurance). “Generally, high-deductible policies with low rates protect from catastrophic events while keeping the monthly burden low.”

These fundamental steps will pave the way to a financially fit life that suits your personal goals. Once you come up with your personal financial strategy, stick with it. It is only the start of a lifelong marathon to develop your financial game plan. Equally important is the discipline required to stick to your plan.

Freedom Financial Network, LLC (www.freedomfinancialnetwork.com) provides consumer debt resolution services through its Freedom Debt Relief and Freedom Tax Relief divisions. The company works for the consumer, negotiating with creditors to lower principal balances due that can often result in savings of up to half the amount owed. Based in San Mateo, Calif., Freedom Financial Network serves more than 4,000 clients nationwide and manages more than $120 million in consumer debt, offering an alternative to bankruptcy, credit counseling, and debt consolidation.