Wednesday, February 23, 2011
Budget Part 2 -Down the Drain
Is this what you feel like is happening with your money?
I know it's been the case for me more times than I care to admit. So I'm trying my best to not let this happen anymore. I've been following a budget designed to eliminate consumer debt and assist me with saving an emergency fund along with funding other savings accounts.
In a previous post I outlined a couple of super simple starting points for taking control of your money:
1. List your expenses
2. Track your spending.
Now as promised I'll cover a couple more points:
3. List your Net Income (Take Home Pay)- Be sure to include all sources of income.
4. Subtract your monthly expenses from your Income.
Do you have enough? If Yes then Yeah for you! (I'd pat you on the back if I could, but I can't so let's just pretend I did.) If you don't have enough then you need to look at where you can cut or you need to generate more income. I'll be sure to share more about this in future posts. If you have extra then you pay more on any debts you have and you can begin savings. Your right on track. If you don't have extra and "just make it" then be sure to stay tuned for future posts on cutting back, because you know you need to get rid of that debt and should start saving.
5. Make some decisions on where/how to cut back. (I'll give you tips on what I do in a future post.)
6. Begin to create a year-long monthly budget. This will help you plan for things that come up throughout the year that we tend to forget about till they're due then we suffer through those months. For example budget in the months when your car registration is due, budget in for the months when you have birthdays for those in your household (kids & spouse), when your kids have school or sports registration fees, back to school expenditures, Christmas, Mortgage Insurance etc. That way you won't be hit by surprise with a super tight month. (Nobody likes those kinds of surprises.)
Now I know all this is super basic and simple. It really is. The hard part is getting motivated to do it and then remaining committed. It's gonna take changes and sacrifices. That's really hard, especially in the beginning.
Your going to have to say "No" sometimes, to yourself, your kids and your spouse. We don't like saying "No". Cuz yes is so much funner. Yes, yes it is. We like "Yes". We no like "No". But the hardest part is in the beginning. It does get easier and once your on track you'll be able to come up with lifestyle changes that you can live with long term. That's the ultimate goal.
I'm up for it. Are you?
Let's keep moving forward.