7 Tips for a 6 Month Money/Credit Make-Over:

I'm not a financial guru, although I did win the business & economics award when I graduated high school. I didn't learn what I know now from college, I'm not even sure schools can teach real money skills. I've learned how to handle my money through a hard fought battle with money and credit that I've fought for many years and from the heat of that battle I've learned a few things worthy of passing along. I've found that money and credit aren't that complicated, but there are rules that must be heeded if you want to improve your financial position. I can't guarantee that any of these 7 steps will work for you, I just know that they have worked for me and should work equally well for anyone willing to follow them for 6 months.

1.Get organized: For me this was to put my bills on a timeline and track when things came due along with when my paychecks came in. The tips I outline below will show you how to be organized, and I will show you how being organized will save you money, build your credit score and allow you to be a good steward of your personal resources. I know it's hard to get started following these steps, but after a few months it will become a habit and you'll wonder why you ever did it the 'old' way. By following this plan, and being more organized, you will find extra money that you never knew you had available, and you'll feel more in control of your money, instead of the other way around.

2.Prioritize your bills: Look carefully at what you are spending money on. Decide which debts should be paid first, what things you are paying for that you really don't need at all, and how much you need to fund a plan for regular savings. Do these things so that you are comfortable with what you are doing. I'm not going to tell you a particular way of doing things that I think is right (or wrong). But I will tell you that it's important to be mindful of what you are doing and how you are handling your money. If you are in debt then you should be aware that there are lots of resources available to get out of debt. (Personally, I highly recommend Dave Ramsey's "Financial Peace University". They helped me recover from some very serious debt issues.) After careful analysis I once found that my bank was charging me a lot of money in my checking account, I switched banks and 'found' and extra $20 per month. Look carefully at where your money is going and you'll find other similar 'cash drains' that you can plug up and immediately reap the rewards.

3.Cut down your number of bills to a manageable number: this may seem strange, but I have managed to cut my bills down to just three separate invoices. I have found that paying some bills with my credit card, and then paying off the card each month has really helped me organize my finances and get a better handle on my personal cash flow. This is important because late fees waste a lot of money, money that you could be using to pay down debt or create a bountiful savings account. For example, I pay my rent with my first pay check and then I pay the remaining bills with my second pay check, whatever is left over can then be allocated to the various savings accounts I have started, like my emergency fund, but this money could also be directed to paying down debt if that is an issue for you.

4.Don't be afraid of using credit cards: In tip #3 I may have scarred a lot of people by using a credit card to pay for living expenses... but using credit responsibly is very important to building your credit score and strengthening your financial life. A trick I found to avoid late charges on my cards is to pay twice a month. I pay at least the minimum on the first of every month, and then make another payment later in the month usually paying off the balance. I can afford to pay off the balance because I use my card as a budgeting and organizing tool and not as a crutch to artificially expand my income. (If you don't think you can qualify for a credit card just do an online search for "poor credit credit cards" ...just do it. And if you want to learn: How Those Evil Credit Cards Can Be Good for Youjust click the link and find out!)

5.Learn to use online banking tools like electronic bill-pay: This will help you with organization and planning, you can set up automatic payments through your bank, or schedule payments to coincide with paydays and due dates, this tool alone can make a big difference in how you pay bills and will help assure you get them paid on time, while also saving you money on stamps!

6.Analyze your bill payments over the first few months and ways to save will be obvious. Go back to step #2 and repeat prioritizing and looking at what you are spending money on. Do this each and every month (yes, forever!). For example, when I first started this plan, I began using my credit card to buy my lunches at work, buying gas and paying for groceries, things I had used cash for in the past. Then, when I read my statement at the end of the month, I could see what was spent on lunches and how much I could save by packing my own. I can then decide if it's worth getting up a half hour early to pack my lunch each day. Having this information allows me to do a cost/benefit analysis of each category and my potential savings.

7.Get a free copy of your credit report and correct any misinformation you find. After 6 months of being on this plan, keeping organized and tracking your costs and payments your credit score will be improved (of course it depends on where you started, if you started with no score or if you started with a 600 score following this plan will help, if you already have perfect credit...then maybe you don't need this plan for that purpose). Especially if you have been paying down debts and making responsible use of your credit cards. Each credit reporting agency has specific procedures for disputing inaccurate information on your report, I would direct you to www.experian.com as a good place to start to review your credit report and make the necessary changes. If you slip from the plan and make a late payment then reset the clock, be sure you have made all of your payments on time for 6 straight months before you look for improvements in your credit score, or ask for upgrades to your card's limits and terms.

Take action and stick to your plan: in your first month you should be working on accurately tracking your expenses. Make an attempt to calculate the boundaries of what you can spend, but save the fine tuning for later when you have live data to work with. After about 6 months of tracking you will know what your average expenditures are for all of your spending categories and you will have become sensitive to the ebb and flow of money both into and out of your bank account. You will have built a solid credit history and hopefully paid down some debt and put a little money into your rainy day fund.