Well if you are like most people, your day is full, actually extra full. Between work, home, kids, lessons, classes, and more, it can be hard to find some time to sit down and really look at your finances. Most people don’t look at them, until tax time, or when they get their slips at the end of the year showing just how much they made. Then you wonder “where did it all go?”
Money is a major source of stress, no one likes to talk about it, you are not taught a whole lot about it in school, and if you are from my era, you may have had parents who kept their finances “hush hush”. It was considered a personal subject, just like your health. So, it is no wonder that it tends to take a back seat to our busy life.
You don’t hear people talking about “budgets” around the water cooler, and your first clue that someone is watching their finances, is when a co-worker suddenly starts bringing his lunch to work. Then maybe that gets you thinking about how much you are spending at work.
You don’t have to be an accountant, to do some simple math, and figure out just where you are. You are responsible for your own financial future, and you can’t bury your head in the sand and hope it all goes away.
There are a few simple steps you can take, to “ease yourself” into your financial world. Don’t dive in head first, this will just give you a big headache, and you will shove it all aside until next year!
Break it down into bite size pieces.
Step 1: Spend one hour tonight, or on the weekend, finding all your statements, bills, checkbook or anything to do with your finances. If it is all over the house, or here and there, this could take the full hour. But that is enough for one session. Find a box and put everything in it, to keep it in one spot.
Step 2: Open all your bills and statements, get rid of the envelopes. and pile them into piles of “bills to be paid” bills already paid” and figure out your “automatic payments” that come out of your bank account, such as mortgage, rent, any other monthly bills.
Step 3: Get a pad of paper and write down your “take home pay” (this will be the net pay or pay that you get after all the deductions) then write down all the bills that you cannot change, such as mortgage, rent, property taxes, utilities, car loan, insurance etc. Make sure to write what it is beside each one.
Step 4: Write down the variable expenses, or expenses that can be changed, altered or controlled, such as groceries, cash spending, eating out, entertainment etc.
Step 5: Add up your take home pay for the month, and now subtract all these expenses. This is the gut wrenching part. Is there anything left over? Or are you in a negative amount?
These are such important steps you have to take, because you can now see on paper, where you stand. Just how much money is going out the door each month, compared to how much is coming in.
Some expenses you cannot change, and you will have to make sure you always cover, these are your fixed expenses, such as rent, mortgage, car payment etc… so if you are short of money, or you would like to keep more of your money, then you are going to have to work on changing your variable expenses, such as cash spending, groceries, eating out etc..
But you should pat yourself on the back at this point, because whether it is good news or bad, you at least know where you stand, and can now get to work on keeping more of your money. Otherwise you are just stumbling along, with no direction, so now you know, and now you know probably why that co-worker is taking their lunch to work!
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