Get your shit in order!

We all know that the economy is in the crapper. We blame Wall Street. We blame mortgage companies. We blame the banks. But have you noticed who doesn't get blamed very often?

Us. People. Consumers.

It constantly amazes me when people don't know how to manage their finances. They have a vague picture about money coming in and going out. They know they have some retirement account out there. The use credit cards whenever they want, and pay them off slowly.

Basically, WE are the reason that things suck. So instead of crying to the government for help, start getting your shit in order!

Start spending less money than you earn!
Start paying off your debt!
Start making smart investments!

I'm going to pick on my little sister for a minute.

She just graduated from college. She has expenses (loans, credit cards, phone, insurance, etc) and she has a job. But she has no big picture.

So I spent a day helping her to make a spreadsheet of all her expenses in a month. Part of that plan was to make a forecast estimator for her credit cards. Based on the average payments she was making, and the current APR, how long would it take her to pay them off and how much money would she pay in interest.

By the end of this she was pretty depressed. But at least now she knows the truth. At least now she can make a plan to get her finances in order. At least now she can be an adult.

So I implore you all. Do the following things:

1. Start reading money management blogs. I'll post some in the comments later on.

2. Start tracking your income and bills each month. You don't need to go as far as writing down every purchase but at least estimate living expenses.

3. Make a plan to pay off your credit cards. Repeat after me "It is not ok to have credit card debt"

4. Start saving money. If you lost your job today, how long before you were a hobo living on the street?

Here's a tool to help you. Sign up for a free account at mint.com. It's a site that links to all your bank accounts, credit cards, etc. It then tracks purchases and helps you make budgets. The site is free because they advertise stuff to you. They see what ways you could save money by switching to an online savings account, or a low APR credit card... and they get a commission if you do it. If you don't feel safe giving up all your online account information then look for other sites that do the same thing. There are a lot out there.

Remember: Knowing is half the battle.