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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Sunday, April 6, 2008 Frugal rule No. 1: Know where money is going Associated Press Financial planner Stacy Francis, president of Francis Financial Inc. in New York, says frugal living requires that you minimize your spending, maximize your income and set achievable savings goals. Some strategies: "The most important thing people can do is sit down, bring out their calculator and discover exactly where their money is going," Francis said. That requires looking at your checkbook, debit card and ATM receipts and credit card statements. Next, "evaluate whether your spending reflects your values," she said. Is too much going for premium coffees every day, and not enough to your house down payment fund? Are there places you can cut back that don't reduce your happiness? How frugal a family has to become depends on its current balance sheet. "If you've been frugal all along and created an emergency fund with three to six months of living expenses, then a job loss won't hit you nearly as hard as the people who have been spending more than they're actually making," she said. What about accumulated debt? Get rid of it as quickly as possible. Families in trouble can defer some debts, like student loan payments, if lenders agree, she said. But families shouldn't take chances with their mortgage debt, she added. "Paying a mortgage has to be your No. 1 priority because it's covering your home," Francis said.

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