Special Reports

Get Your Finances In Check With A Money Makeover

BOSTON (WBZ) ― No question, these are tough economic times. What can you do to adjust to rising prices in the short term, and still fund your longer term goals like saving for your kids' college and your own retirement? To find out, we arranged for one family's "money makeover." See if you recognize yourself.

Jeff and Denise Burnham live north of Boston with two kids and two jobs, and that means they have the same kind of money worries we all have. "I think just the general costs of everything going up and the income shrinking," says Jeff. "I'm more worried than I've ever been, let me put it that way," says Denise.

We asked certified financial planner Dave Caruso from the Coastal Capital Group in Danvers to give the Burnham's a money makeover. "I think the Burnhams are a typical family. Sometimes one little thing can get you off track. Now is their turn to get it back on track," says Caruso. The Burnham's took on significant credit card debt several years ago because of health problems, and that's the first thing that's bogging them down. "We just can't get ahead of it," says Denise.

They need to find areas to cut so they can knock down that debt. But that's easier said than done with gasoline at $4 a gallon, food prices putting us all on a forced diet, and the stock market on a downward run.

Financial planner Caruso says you have to start by carefully tracking every dollar you spend. He suggests doing it for at least a week, or even a month if you can be that disciplined. Why? Because most of us don't know where a big chunk of our income goes. "Everybody has a leaky bucket, things leak out that we don't see. We can't account for every penny. So what you need to do is plug that bucket," says Caruso.

Once the Burnhams figure out exactly what they're spending, they can take action. "Everything you spend is a choice. You've got to start making choices," advises Caruso.

"I think we'll just look at the things we do day to day," says Jeff Burnham. "I get a cup of coffee every day on the way to work. I mean I can brew a pot at home. That'll save $10, $12 a week right there," he adds.

And there are plenty of places to get ideas about becoming a thrifty New Englander. "Do a Google-frugal search," suggests Caruso. "Because if you hit 'frugal' on Google it'll show you a lot of people who are using some very interesting ideas about where to go and what to do," he adds.

And once you cut spending, you can not only deal with these crazy gas prices, you can start working on other priorities. For the Burnhams, that's creating an emergency fund to carry them three to six months, opening college savings accounts for their children, and continuing to save for retirement. At the end of the money makeover session, the Burnhams were ready to go. "I have to say I feel a lot more optimistic than I did," says Denise.

"We're going to make it happen," adds Jeff.

Other questions the Burnhams and all of us need to ask are whether we have enough insurance, and, if you have children, is your will in order.

Try these links to some of those "Google-frugal" websites the financial planner mentioned:

www.frugalliving.about.com

www.frugalvillage.com

www.allthingsfrugal.com

www.frugalsimplicity.com

Certified financial planner Dave Caruso's Web site: www.coastalcapitalgroup.net

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