Many people think about financial planning and taking control of their finances. Unfortunately, many of these people fail to follow through.
Most people 'shoot from the hip' when it comes to managing their finances. For extra motivation, consider these two things:

First, you'll feel much better if you take control of your finances. Money worries are one of the top two or three causes of stress and anxiety.

The other big reason people should put a little pressure on themselves is simple: the results. They'll do better financially and they'll have more money.

Building a financial plan that includes paying yourself first with savings and developing a budget really does make a difference. You'll see opportunities to save that you never saw before.

Would you like to start off 2008 feeling more relaxed and knowing you are on a firm financial footing? By following these five easy steps you can gain control of your finances before year's end:

Assess
First, assess your current financial situation. Start by calculating your net worth. List all your assets (what you own) and all your liabilities (what you owe). If your assets exceed your liabilities, you have a positive net worth. If you have more liabilities than assets, your net worth is negative. At the end of each year, recalculate your assets and liabilities to determine your progress toward building your net worth.

Identify
Once you have a clear idea of your financial picture, set financial goals. Whether you plan to buy a home, take a vacation, retire early or pay off debt, your financial goals help you determine what is important to you. Financial goals also serve to motivate you; it's always easier to save money when you know what you are saving for.
CPAs recommend that you divide your goals into short-, medium- and long-term ones. Be sure each goal is focused, realistic, measurable and has a specific target date. Review your goals regularly, and make adjustments when necessary.

Budget
Next, create a budget that will help you attain your financial goals. The key is to spend less than you earn. The first step in preparing a budget is to figure out your current cash flow. Add up income from your salary, bonuses, investment income and any money you get from other sources.

Next, track all your expenses for a month or two, including regular expenses such as your mortgage or rent, food, transportation, insurance and credit card payments. Also track discretionary expenses, including entertainment, dining out and gifts. Factor in expenses that do not occur every month.

Record every dollar you spend, whether it's by cash, check or credit card. Seeing how you spend money will help you determine where you can cut or redirect funds toward meeting your financial goals.
When creating your budget, pay yourself first. That means deciding how much you can save each month and treating it like any other bill. Better yet, have money automatically deducted from your paycheck and deposited into a savings account. You won't miss what you don't see.

Manage
Managing debt is a critical step in gaining control of your finances. If you carry a high level of debt, make paying down your credit cards a priority. For example, consolidate your debt on a credit card that has a lower interest rate and/or pay off high-interest debt first. You can also double or triple your card's minimum monthly payments. Depending on your balance, higher payments can save you thousands in interest payments and shave months, maybe years, off your debt.
Prosper

Invaluable peace of mind comes with gaining control of your finances. If you need help in completing these steps, contact a Toscano & Ardito CPA. He or she can work with you to create a plan for achieving your financial goals.