- BREATHE. Rest assured that you can beat your budget! So many people let their money woes get the best of them, and it negatively affects their decision making. Yet, there are people who remain optimistic (and realistic) and stick to their goals of paying off debt/cutting expenses/increasing income and succeed! You can be that person, too. Just be very clear about what your goals are, remind yourself of these goals every single day, and work towards achieving those goals every single day. It’s no walk in the park, but we have to do something differently to get something differently, and if you’re committed to improving your financial situation, then you will make the difficult decisions necessary to achieving such.
What are your main money concerns?
- Is it debt?
i. Who do you owe and how much to each?
ii. What types of debts do you have? (Ex. installment, revolving, medical, utility, other)?
iii. Which debts are most important (ex: most expensive/highest finance charges, closest to your limit (if a revolving debt), due date)
iv. What are the minimum payments for each debt?
- Is it unexpected expenses?
i. What types of expenses are these? (ex: car repairs, medical, job related)
ii. How often have these “unexpected” expenses occurred in the past three, six, and nine months? Perhaps it’s time to look at factoring this expense into your budget or making an investment to eliminate maintenance costs (ex: newer car, surgery to keep away from patchwork fixes, etc.)
- Two ways to “find” this additional money is to increase your income (ex: overtime, part-time job, bartering, yard sale/consignment shop etc.) and cutting back on your expenses (ex: eliminate cable or cut back to basic, don’t pay for what you don’t use, use coupons, shop on sale only, etc.)
- Track your expenses for at least a month (i.e. write down where every single penny goes). This will give you a bird’s eye view of where your money is going and you’ll be better equipped to make decisions on cutting expenses. For example, if you notice you spend $400 a month on eating out & groceries, you can make decisions to cut back by shopping at food closets, Farmer’s Market, coupons, sale only items, etc. The savings that you reap should go towards your financial goals. Categorizing your expenses is also very helpful (ex: transportation = gas, oil changes, auto insurance, car washes; food= groceries, eating out; bills= rent/mortgage, utilities, phone, cable/Internet; savings= emergency fund, vacation money; etc.)
- SAVE. SAVE. SAVE. Your money is cheaper than anyone else’s. In case of emergency, or you spot something that you want but isn’t accounted for in your monthly budget, having a little money on the side will allow you to weather the unexpected and/or purchase what you want. Financial planners recommend that we have at least three to six months of our living expenses set aside. A more realistic and immediate goal, however, may be several hundred dollars. To ensure your success with saving, automate it (payroll deposit or automatic transfers after you get paid; you can’t spend what you don’t see).
- If you consider increasing your income, think about the additional costs of doing so. For example, if you work overtime or get a part-time job, and it requires you to drive a lot (gas/tolls) or increase your child care expenses, would the income you generate exceed the expenses of earning that income? If not, think about other alternatives; if so, go get that money!
- Stop using credit. If that means cutting up or placing your credit cards in the freezer, do it. The progress you would make paying down your debt would be defeated by the additional purchases you make. So please, stop using credit.
- Start today: procrastination is a dream killer. Even if you start saving five bucks a week, it’s something! 1 Corinthians 16:2 (NIV) says on the first day of every week, each one of you should set aside a sum of money in keeping with his income, saving it up, so that when I come no collections will have to be made.
A little something extra…
I absolutely LOVE www.bankrate.com. They offer great insight on debt management, budgeting, saving, and so on. Check it out!
You might also want to pull your credit report and see if all of the information being reported about you is accurate. Misinformation on reports affects tons of people’s ability to get credit and maintain good credit scores. Visit www.annualcreditreport.com to get a free copy from all three of the credit reporting bureaus.
Lastly, Proverbs 27:12 (NIV) The prudent see dangers and take refuge, but the simple keep going and suffer for it. Simply stating that those who are committed to a budget refusing to take on unnecessary debt are wise, but those who go out and buy, buy, buy knowing that can’t afford are setting themselves up for major financial and emotional suffering.