Things got really crazy around here yesterday and I realized far too late that I hadn't posted anything to my blog. As I often find, life happens when I have other plans. Does that ever happen to you? You have one day planned and another one completely takes over. The best thing to do is roll with the punches and do what needs to be done...oh and try to enjoy the surprise that the day brings.
Now that you have the financial information of income and expenses, it's time to evaluate where you stand financially. And don't worry if things don't look good. Everyone at one time in their life winds up in a less than stellar situation financially. The best thing to do is to tackle it right away. The worse thing you could do is to ignore it.
To evaluate your finances, list your income and your expenses both fixed (like mortgage/rent, car payment, insurance) and variable (utilities - unless you have arranged for a fixed amount, credit cards, medical, groceries, clothing, etc.). Does your income cover your expenses?
If not, can you spend less on your variable expenses? For instance, instead of buying new clothes shopping at second hand stores like GoodWill can save an enormous amount of money. Actually, most stores carry other items from furniture to kitchen items to drapes and bedding. A good wash and you can save quite a bit of money.
When shopping for groceries be sure to take advantage of sale items as well as house brands. Plan your weekly meals around the sale items. If possible, make meals from scratch as it generally saves money.
How about credit cards? To pay down that debt, first of all, stop using them. Next, if you have multiple cards, start with one card to pay off. For encouragement, pay off the credit card with the lowest amount by paying only the required amount on the rest of the cards and as much as you can on the card you choose to pay off first. Once that card is paid off, tackle the card with the highest interest rate. It may take time, but in the end, you will be debt free.
About 65% of our citizens live paycheck to paycheck. In other words, there is no cushion if an emergency happens like losing a job or medical expenses. Financial advisors suggest that folks build up an emergency fund that equals between three and six months of their normal expenses. So, even if it's a small amount, try and put away some money each month toward your emergency fund.
Now it's time to really look at your finances and make a budget. I know, I know, budgets aren't fun but they do work if you stick with them.
Talk with you tomorrow...