May 6, 2009 6:40 PM
In a time when the economy is in a downward spiral, many Americans have found themselves in a sticky financial situation.
It's not easy making over your finances, but it can be done.
Josh and Katie Proctor took advantage of some basic principles to get out of debt, and made the most out of their green.
Josh says, "We had about 5 to 6 thousand dollars between the two of us, just credit card debt."
The young couple knew it was important to have financial stability in their future, especially now that they have a 5 month old daughter.
Katie says, "We took all our receipts and started breaking those down to see what we were actually spending the money on."
Josh and Katie made a budget and put their money in sub accounts.
Josh says, "You have fifty dollars to spend this week on groceries, and you spent your entertainment money, you're taking out of the grocery money, so that forced us to make it tactile."
Before the Proctor family got on the financial road to recovery, they sought help from a financial advisor.
Brienne Dylewski is a certified financial planner with Financial Architects.
She says there are four reliable ways to make over your finances.
First, it's important to have an appropriate budget in place.
Then, build a cash reserve.
Dylewski says, "Something that is specifically there in case an emergency comes up."
Three, clear out your credit card debt, and pay them every 30 days.
Pay the minimum on the cards with the lowest interest.
Dylewski says, "Put the bulk of everything else, every other dollar that you're gong to spend on credit cards on the one with the highest rate."
Finally, create goals for yourself and invest on a regular basis.
Dylewski adds, "Mutual funds are a really good choice for most investors because they do have some advantages.
After two years, Josh and Katie are now out of debt.
Josh says, "We have monthly savings, we have mutual funds, we have a cash reserve. We have an account we opened for her college, we have something for our retirement."
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