Begin Your New Financial Start

Theres nothing like getting a fresh start. And, its always time for a new financial start. Always be sure to be implementing the basic sound principles of personal money management.

Strategy: Increase your take home pay.

This fundamental strategy is still underutilized by the majority of taxpayers. Instead of allowing your employer to over withhold federal taxes and cause you to wait until the end of the tax year to file for a refund, adjust your W-4 form now. Each January, some employers issue new W-4s to employees, offering them an opportunity to make adjustments to their payroll withholdings. Ask your employer for a new W-4 for 2006. The more allowances you claim, the less federal tax will be withheld from your paycheck, thereby increasing your take-home pay. Use the worksheet attached to the W-4 to assist you in calculating the appropriate number of allowances to claim. Your goal is to "break even" with the IRS by year-end.

What can you do with the extra money from this little raise? Plenty! How about paying off those nagging credit cards you charged up during the holidays? Consider investing in a Roth IRA. Use the time value of money. Use your money throughout the year, rather than making an interest-free loan to the IRS.

Strategy: Start a structured debt-reduction program.

Is there too much month left at the end of your money? If your answer is "yes," consider debt consolidation. This simple strategy involves nothing more than shifting balances that you owe on "bad debt" (such as on high-interest, nondeductible credit cards) to "good debt," lower interest, tax-deductible, second mortgage or home equity loans. Once you have consolidated your debts in this way, your overall monthly payments should be considerably lower, thus increasing your cash flow.

What should you do if you do not own a home or have adequate equity from which to borrow? Consider transferring your high-interest-rate credit card debts to lower-rate cards. Avoid the so-called "consolidation" loans, which can considerably increase your pay-off time and amount. Visit http://www.TheMoneyExpert.com for referrals to issuers of the best, low-interest-rate credit cards and for specific help with your debt situation.

If you already have adequate credit or cannot qualify for additional credit cards, contact your creditors and request an immediate reduction in interest rates. Our members have reported receiving as much as a five-percentage-point reduction in rates, simply by asking! In our experience, you will have an almost 50-50 chance for a rate reduction. Creditors will be more willing to accommodate your request when a good payment history is reflected on your account.

We recognize that sometimes it is too easy to lose track of your debts and obligations to a point that you might wake up one morning and realize that you have acquired too much debt, but have little or no idea of where your money is going. We offer our members the benefit of professional debt-reduction consultations to assist you in getting back on track and keeping focused. Debt and credit tracking forms to Money Mastery members of www.TheMoneyExpert.com.

Strategy: Use the 10% solution.

Set aside 10% of your gross annual income to pay yourself first. This is a time-proven strategy. Invest it through your retirement plan at work and get the added benefit of possible matching contributions, or invest it in an IRA. Don't put yourself at the bottom of your financial priority list. You earn the money and you make the decisions regarding what you do with it.

Put yourself and your family at the head of the list of expenditures, then, no matter what happens, you will have financial security.

Strategy: Use the Money Movement Strategy and invest for the long term.

Our investment strategy has been proven over the years and its success has been attested to by many members as well as through an independent study. Knowing where you should be invested, according to the Money Movement Strategy, is not difficult. Look on the investment pages of each issue of your monthly magazine for up-to-date information and recommendations for best-performing mutual funds. Money Mastery members receive support in tailoring investment options to their specific needs. Visit http://www.TheMoneyExpert.com for details.

Strategy: Buy your principal residence.

Owning your principal residence has always been a cornerstone of financial success and security. Generally, homeowners are looked upon more favorably than are renters, based on potential stability. There is also the advantage of a generally more favorable credit rating. Take advantage of the traditional benefits of tax deductions for payments of your mortgage interest and real estate taxes. Homeowners also realize tax-deferred appreciation in home value and equity buildup. You can borrow against this equity at any time.

Thanks to recent tax legislation, the Taxpayer Relief Act of 1997, you can keep a substantial amount of the proceeds from the sale of your home tax-free, even escape capital gains tax on the sale of multiple residences. If you own and live in a principal residence for any two of the five years prior to the sale of the residence, single taxpayers can exclude capital gains of up to $250,000 and a married couple can exclude gains of up to $500,000. The additional good news is that you can do this every two years. What a great, wealth-building strategy, regardless of short-term economic conditions!

While mortgage interest rates are still low, it makes absolutely no financial sense to rent a residence if you plan to remain in the same area for at least five years. Whether you rent or own, you are paying a mortgage yours or your landlord's. It's your choice. Federal and state programs are available to assist you with the down payment. Contact your local Department of Housing and Urban Development (HUD) office or local mortgage lenders for program details.

Strategy: Start a small business.

If you are not getting paid what you are worth or if you just can't seem to convince your boss that you deserve a pay raise, jump-start the New Year by starting a part-time small business to supplement your regular salary. Fortunately, tax laws favor those who work for themselves, especially those who choose to work out of their homes. In addition to increasing your income, the opportunity to become financially independent is a strong incentive. Consider establishing your own Web site for your business. Once you have decided on a particular product or service to offer, explore the benefits of setting up your business "online."

Strategy: Cut your insurance premiums.

Your financial and personal situations are subject to change and those changes can directly affect your insurance needs.

Consequently, we have long recommended that you reassess all your insurance needs every two years. Money Mastery members have access to our expert alliances for their insurance needs.

The road to financial independence can be quite bumpy. However, by using the best, tested routes and by avoiding the "potholes" along the way, you will increase your chances to arrive at your destination safely, securely and wealthy.

-Jim Robinson is a Financial Hotline Educator for http://www.TheMoneyExpert.com with an expertise in tax planning, tax preparation and small business start-ups.

For additional money strategy and to find out about the Money Mastery Program, visit: http://www.TheMoneyExpert.com and pick up a FREE subscription to FREE MONEY TIPS, The Worlds Leading Money Strategy Newsletter

2006 International Administrative Services, Inc.