On the Thursdays of February, I am going to delve into your finances and how to make things better! As with anything else, the first step is to know what your actual budget is. If you have never made or had one, here is what you need to look at:
Know What You Spend - First of all figure out what all your bills are monthly. Housing (house payment or rent), utilities (heat/air, phone bill, electricity & trash pick up), food (groceries, eating out and school lunches), entertainment packages (streaming, internet, cable or satellite bills), car expenses (car payment, gas, maintenance), insurance (health, housing, car and any other insurance), and then miscellaneous (going out for fun, clothing, grooming, pet care if you have pets and any other spending that doesn't fit into the other categories). Do you best to include everything you can that you spend NOW, not what you hope to spend, or just need to spend. You need to know what kind of money is going out every week, month or paycheck. The only way you can start to evaluate if you need to work on things is to see what is actually happening. Think of it like when you go to the doctor for a check up. The doctor checks all of your body's functions to see where it is at before he suggests a lot of changes. You need to do this with your spending too.
Know What You Save (or Not) - Next you need to take a look at what you save each month. Usually this number can always go up even if you are saving. Look at all your other spending and see what can be trimmed away so that you can apply that money to your savings. Are there services you are spending for monthly that you don't use, like a gym membership or something else? Are there places you can cut back on that you may still use? Can you change phone plans or insurance coverages? Can you refinance your home at a much lower rate? Can you be more conservative on your utility usage to make your bills a bit less? Go over things with a fine tooth comb to do something to be able to put money aside. If you can find a way to get $200 saved, you can find a way to save $500. If you can save $500 you surely can save $1000 and so on. Start an emergency fund to take care of only emergencies arise (Christmas gifts are not an emergency!). After you have at least some started there, then start saving for the other things you would like to have instead of using credit to get them. The less you are in debt, the better your income and savings will be. Speaking of debt, make a solid plan to pay off your debts as well. Some say pay off the smallest first to gain confidence and momentum to pay off the big ones, other say to pay off the high interest rate ones first. You know which ones are the most dangerous to let linger, so make up your own mind as to what you need to do.
Get Professional Help - These are just some small suggestions to get you at least looking at your finances and get you on a path to healthy saving and spending. Some of you don't keep track of what you spend a month on credit and just keep paying whatever monthly payment you are told to make and some of you keep extra good track of where everything goes, but, haven't evaluated things in an long time and then there are others of you who never had paid any attention to your finances and are now in a big mess. Getting help is a first step in the right direction. Ask a friend you know who keeps a good budget and is very careful with their money, or, if you are in dire straits, getting some professional help may be the way to go, so make that appointment and ask for help.
Finances aren't everything in life, but, knowing yours is the best way to ease your stress and to keep yourself from falling into a financial trap. If you are already stuck, getting out of that trap will make a world of difference in the other areas of your life as well, but, you have to start by knowing where you are at right now! You can't ask for a rope to pull you up if you ignore that you are at the bottom of a well, right?!
Until Next Time!
Jen Lush--Associate Broker and Keeper of the Home Finances Photo Credit: Micheile Henderson