If you are one of the millions who are struggling to get out of debt and currently live from paycheck to paycheck, you might be interested in knowing that there is something you can do to help ease the pain and get you back on the right track to reclaiming your life. It is a simple thing to say, but can be a very difficult thing to do and that is: try and get $500.00 in savings.
Showing posts with label money. Show all posts
Showing posts with label money. Show all posts
02 February 2009
Putting Your Budget on a Diet
Yeah, you heard me correctly. It's time to put the old budget on a much needed diet. I figure since I have bored you all to tears with my weight loss journey, I might as well capitalize on this theme and take it to another level. Due to our current situation, I am in the process of creating a new budget; one that we can actually work with. So, I'll take you all along for the ride.
First thing to do is to gather all your bills and place them on the table in front of you. You will need to include every bill you pay on a regular basis: Mortgage, insurance, credit cards, sewer, water, garbage, Association fees, phone, cable, gas, electric, fuel, food, and any other ones you may have. These constitute your fixed expenses. If some of them are billed on a quarterly basis, then you will need to divide that amount by 3. If billed on an annual basis, then divide by 12. You will most likely have some bills that fluctuate from month to month, so in order to get a rough estimate, try and get your bills from the previous year and average them out. Once you get a monthly total, you will have a pretty good idea of where you stand.
The next part of this budget is going to seem rather odd, but it will really be an eye-opener. As you go through your day, whenever you buy something write down a description and the amount you paid. Keep a diary of these purchases for at least one week. At the end of the week, add-up everything you purchased and take a look at the total. Most likely, you will be surprised at where your money goes. The $5.00 cup of coffee or the $1.50 spent on a snack may not seem like a great deal at the time, but it adds up over the days.
Now that you have a better picture of where your money is going, you will be in a much better situation to begin re-allocating your money to where it is most needed, for example paying off those credit card bills. If, by chance, you find that you are over-budget, you will need to take a hard look at your current expenses and decide where you can cut some fat. Look around and try and find things that you Really don't need. For example, do you currently have cable and subscribe to every service they offer? Try and look into cutting back to a more basic service. Ask yourself, do you really need all those movie channels? How often do you watch those movies and how often do they actually play movies you care to see? What about canceling that expensive service and putting your money elsewhere. If you really need your movie fix, what about joining Netflix or Blockbuster. That way you pay for only the movies you want to see.
In our case, it's water delivery. We get bottled water delivered twice a month and shell-out around $48.00 for the privilege. Now, the water itself is not that expensive, it is the rental cost of the dispenser which drives the price up. So, we are currently looking into discontinuing that service. Thus, we can steer that money towards one of our bills.
To sum up, my point here is to try and give you tips on how to visualize your current financial situation. If you can actually see where your money is going, you will be in a better situation to be able to control your finances, instead of them controlling you.
First thing to do is to gather all your bills and place them on the table in front of you. You will need to include every bill you pay on a regular basis: Mortgage, insurance, credit cards, sewer, water, garbage, Association fees, phone, cable, gas, electric, fuel, food, and any other ones you may have. These constitute your fixed expenses. If some of them are billed on a quarterly basis, then you will need to divide that amount by 3. If billed on an annual basis, then divide by 12. You will most likely have some bills that fluctuate from month to month, so in order to get a rough estimate, try and get your bills from the previous year and average them out. Once you get a monthly total, you will have a pretty good idea of where you stand.
The next part of this budget is going to seem rather odd, but it will really be an eye-opener. As you go through your day, whenever you buy something write down a description and the amount you paid. Keep a diary of these purchases for at least one week. At the end of the week, add-up everything you purchased and take a look at the total. Most likely, you will be surprised at where your money goes. The $5.00 cup of coffee or the $1.50 spent on a snack may not seem like a great deal at the time, but it adds up over the days.
Now that you have a better picture of where your money is going, you will be in a much better situation to begin re-allocating your money to where it is most needed, for example paying off those credit card bills. If, by chance, you find that you are over-budget, you will need to take a hard look at your current expenses and decide where you can cut some fat. Look around and try and find things that you Really don't need. For example, do you currently have cable and subscribe to every service they offer? Try and look into cutting back to a more basic service. Ask yourself, do you really need all those movie channels? How often do you watch those movies and how often do they actually play movies you care to see? What about canceling that expensive service and putting your money elsewhere. If you really need your movie fix, what about joining Netflix or Blockbuster. That way you pay for only the movies you want to see.
In our case, it's water delivery. We get bottled water delivered twice a month and shell-out around $48.00 for the privilege. Now, the water itself is not that expensive, it is the rental cost of the dispenser which drives the price up. So, we are currently looking into discontinuing that service. Thus, we can steer that money towards one of our bills.
To sum up, my point here is to try and give you tips on how to visualize your current financial situation. If you can actually see where your money is going, you will be in a better situation to be able to control your finances, instead of them controlling you.
Subscribe to:
Posts (Atom)
