|This may come as no surprise, but three out of
four Americans hate financial planning. Many of
us like to dream about things such as buying a new
home, traveling to different places, sending our
children to college, or even retiring early. Unfortunately,
the reality of financing those dreams often prevents
many of us from living them out, which may explain,
in part, why so many people hate financial planning.
With some patience, planning and discipline, you
can achieve some if not all of your dreams, and
at the same time, feel better about yourself and
Get Started Managing Your Money
by Terry J. Rigg
There are literally thousands of articles about how you
should or should not manage your money. Myself and other
well intentioned money saving wizards bombard you with
ideas of all that you should be doing. However, if you
are behind two payments on your mortgage or rent, credit
card debt up to your ears or there is a tow truck waiting
outside to repossess your car, not much of what we say
really seems to fit your situation.
This article will attempt to give you some guidelines
to help you get started no matter what your situation.
The steps are fairly simple. Access the Situation, Damage
Control, Find a Way and Get on Track are just 4 steps
that you will need to
Access the Situation
Sit down with a piece of paper and a pencil and find out
where you are now. No I'm not talking about a budget yet.
Many people never take the time to get a picture of what
they have coming in compared to what they have going out.
On the left
side of the paper put down any income you have. Only consider
take home money because this is all that matters to you
right now. On the right side of the paper write down all
of the bills that you have coming out this month. At the
bottom of the paper, put down any bills that are past
due with the dollar amount needed to bring them up to
date. Now total everything. Then subtract your bills from
your income. If there is anything left over after bills,
deduct what it will cost you for food and other necessities
for the month.
If you are behind on your bills or just don't have enough
money left after bills to buy what you need, something
has to be done. This is where you have to set priorities.
The first step is to eliminate anything you don't absolutely
need. Some good examples of this are things like call
waiting and other extras on your phone bill, selling that
second car unless it is needed to earn income or stop
Here is a priority list of how you need to spend your
money if you are behind:
1. Groceries and necessary health items
2. Mortgage or rent
4. Other bills such as installment loans or credit cards
Notice that the above list adressess your basic needs,
food, water and shelter, first.
Your next step is to call your bill collectors and let
them know about your situation. I guarantee hiding from
them will only make things worse. Let them know you can't
pay them. Most important is to tell them you are working
on the situation and will keep them informed. You will
be surprised how many will work with you.
If you can't seem to get control of this on your own,
consider contacting a free credit counseling service.
You can find Consumer Credit Counseling Service at www.credit.org.
They can make arrangements for you to pay them a set amount
each month to be distributed to your bill collectors.
Find A Way
The fact is that you need to get your finances in order,
if for no other reason than your sanity. You can do one
of two things to help with the problem. Increase your
income or decrease your spending. While there are several
ways to increase your income, they don't necessarily help.
Let's take the example of getting a second job. You have
extra expenses such as transportation, extra taxes, food,
etc. that will cut deep into what you make.
Your best bet is to decrease your spending. You can start
by visiting my web site, The FREE Budget Stretcher Newsletter
at http://www.homemoneyhelp.com. When you subscribe, you
will find links to several hundred sites that provide
ways to cut your spending. Here is a list of other sites
that can help:
The Stay-At-Home Parents Page
You Save On Taxes.com
I have chosen these sites because all of the information
is free. I can almost guarantee that these sites will
have what you need.
Get on Track
After you have looked into all of the above, it is time
for a budget. The last thing you need is a budget that
takes most of your time just to manage. I have developed
a simple, easy to use budget system that will take very
little of your time. It will also help organize your bill
paying. You can find The Complete Budget and Bill Organizer
at http://www.homemoneyhelp.com/BBOonline.html. This organizer
is free. Whether you use my budget or someone elses, you
must establish a budget and stick to it.
If you are reading this article, chances are you have
a computer. Use it to find other ideas to help you manage
your money. Try searching key words like: money saving,
budget help and credit help.
About the Author
Terry Rigg is the author of Living Within Your Means -
The Easy Way http://www.homemoneyhelp.com/ebookadpage.html
and editor of The FREE Budget Stretcher Newsletter and
Budget Stretcher web site http://www.homemoneyhelp.com.
He has 25 years of experience counseling individuals and
families concerning their personal finances.