Welcome to my new series “Manage Your Mess Monday”. This series will focus on organzing your life and home. My goal is to have the series last 2 months with one post per week. I hope you find some useful tips to help you manage any “mess” you may have in your life.
Week 1-Your Budget
Sticking to a set budget is crucial to having financial stability. People who don’t have a budget often over spend and waste money that could be better spent on bills and savings. We follow Dave Ramsey’s plan and have had a lot of success so far. If you feel overwhelmed when the word budget is said, below is an easy set of directions to help you get started. Remember, one small step at a time can make a huge difference in your bottom line.
Where to start?
Basically you need to find out where your money is going each month.
1. Start off with the money you bring in (your income).
2. Write down your fixed expenses (oh no! Not a financial term!?!). Relax, this just means to write down all of your bills that are the same each month such as rent, car payment, etc).
3. Write down your variable expenses (breathe). This means to write down bills you owe that change each month such as credit card bills, utilities (power, water, etc).
4. Find your surplus or deficit (think happy thoughts). This means find out what you have left over each month after bills and expenses (good for you if you have a surplus) or what you are lacking (deficit, hey, it happens…)
Making a plan
After you have figured out where your money goes each month, how much you have left over, or how much you lack to cover your costs, it’s time to make a plan.
1. If you find that your income is not enough to cover your costs, then you need to cut costs. You may ask, “How?”. Begin by making a list of absolute needs (housing, electricity, water, clothes, and food). Then look at what remains on your expenses list and start cutting. This may hurt, in fact, it probably will, but you have no choice if you are living beyond your needs. Magazine subscriptions, gym memberships, daily trips to get coffee, and going out to eat are NOT absolute needs.
2. If you have enough income to cover your expenses, but money is still “tight”, then ask yourself the hard question, “What am I spending money on that is not a NEED?” and then make some goals from there.
Stay tuned next week when we discuss managing the mess that is your schedule!