The last few weeks I have suggested that you complete some tasks. The first one was to ask yourself "Why do I want to be financially sound?"

While the question may sound trivial, it's really an important one.

The response I hear most often is "To be able to buy anything I want when I want it and never have to worry about having enough money to afford it." Attainable? Perhaps long-term or if you pick those lucky lottery numbers! Most people would rather, at least right now, to have money left over at the end of the week. That goal is much easier to attain!

Another task was to write a list the reasons you want to be financially sound. I even suggested cutting pictures out of a magazine that reminded you of a financially secure lifestyle. This could be pictures of boats, nice homes or great cars. It could also have been pictures of people who look financially sound. I suggested you display these items on your refridgerator.

I bet you are wondering why or thinking I've lost my sanity? Simply put, it is a great way to keep you focused! By looking at these things, your list, your pictures, you'll remind yourself over and over of this important goal each time you are in the kitchen. It really works!

I also suggested you create a budget. It can be as basic or detailed as you want it to be. Create a budget listing all your bills and their balances or average monthly payments along with yourr income. Some people create their budget on paper. Others create spread sheets on their computer. You do whatever works for you!

I don't want you to include a miscellaneous section in your budget, nor do I want you to create trivial catagories such as "eating out" or "movies/entertainment". For now, just your bills and income. We'll come back to this budget later.

The next task was to balance your bank account. Bring it up to date. If you need help, head to the bank. Your bank officer will be happy to help you and they have the tools and the resources to bring you current. Rather do it yourself? Check out these step-by-step instructions.

One more thing: check your credit report. Everyone is entitled to 1 free "look" at their credit report each year. What you will receive is your "flat file" or all the information contained in your credit file. You won't get your FICO score, but that isnt important right now.

The only website that the FTC and most banks recommend is www.annualcreditreport.com. Print out your credit files from the 3 credit bureaus. You are allowed to correct any informaition that is on each credit report online.

Most people are surprised at what they find on their bureaus. Many have wrong information and others find that some companies who they thought were reporting, are not. When I checked mine, 2 of the bureaus listed my birthday incorrect. They made me 9 years older.

Keep these files handy. We'll work on them together next week.

Share with us by leaving a comment! Why do you want to be financially sound?

Most of us loose money everyday. Some of us don't realize it. Others simply don't care. For a lot of people that lost money could come in handy to pay down debt.

On Tuesday, we "found" $260.00 in one month for my friend just in overdraft fee's!

Today I'm referring to households who pay only the minimum payment on credit cards, loans and lines of credits as well as those people who wait for the "late" reminder on their bills as a "reminder" to pay it.

Let's look at these a little closer.

Minimum Payments:

Minimum payments can, over the long run cost you dearly.

Here's an example:

Lets say you have $8000.00 in credit card debt (or a loan or line of credit) at 15% interest and your minimum payment is based on 3% of the balance.

If you just paid the minimum payment each month (starting with $240 a month, payments decreasing slightly as the principle is paid down) and never put another dime on that credit card it would take you 224 months pay it off. To the tune of $5576.70 in interest.

But what if you could pay just $50.00 a month more?

You would roughly pay all this debt off in 35 months and only pay $1871.00 in interest!

We just found: $3700.00.

I came up with this hypothetical example using one of the many great calculators at http://www.bankrate.com/brm....

Late Payments:

Late payments are totally avoidable and, over time, can be costly as well. Getting one is simply giving money away, not to mention how they could effect your credit score.

Late fees on utilities and credit products run from $5.00 to $35.00 and could be more. If you are consistantly late on more than one bill, the late fee's could really add up over time.

Late fees at $5.00 x 12 months: $60.00.

Late fees at $35.00 x 12 months: $420.00

Look at all that money we just found!

Readers, I have a challenge for those of you this weekend: Create a budget!

Make a list of all your bills, what you own on credit cards, loans and lines. Figure your minimums. Create a workable budget for rent/mortgage, utilities and groceries, living expenses. It doesnt have to be real detailed and you don't have to take a lot of time, just create something to give yourself a good idea where you stand. Keep it handy, we'll work on it next week.

Use the budgeting calculator at bankrate.com . It's great.

Balance your checkbook. If you need help, leave me a comment.

Keep track of your spending habits. Each time you swipe your debit card or write a check, make a note what you purchased. We'll talk about this too.