1. Write out all known bills and group spending in categories? I know some people may say write out your income first, but most of us know how much we bring in monthly. What is often unknown is how much we spend monthly. You may be surprised to see how much you are spending in certain categories. After I reviewed my year to date spending I had a few months where I was spending more than was coming in.
2. Know how much is coming in. I think most of us our aware of the amount of money we have coming in monthly. I’ve watched quite of few financial audit videos and I’m surprised by the people that are unaware and just spending freely. That is probably why the majority of Americans are living pay check to pay check.
3. Write out each debt the due date and the monthly minimum. Then figure out how you want to tackle this debt. I recommend using the debt snowball approach. You pay off the smallest debt first and work your way down. It has helped me to pay off debt, see it gone and feel motivated.
4. After you’ve reviewed your budget and where you are look at areas you may need to tighten up. Change is uncomfortable and getting out of debt should be as well. You will have to sacrifice the hair, nails, makeup, clothes, or eating out.
5. Set financial goals. Start an emergency fund of at least $1,000. Complete savings challenges. The cash envelope system has worked best for me. I recommend using cash because you see the money leaving and have more of a connection to it. Some of you may be more disciplined than me and be able to budget and spend from your account. Whatever you do find a system that works for you and stick to it.
I started this month’s budget off wrong. I wrote down the amount of money I needed to get out and the denominations, but for some reason when I got to the bank I decided to wing it. I had to adjust what went into each envelope based on what I had. I’ve also blown through my eating out money in one day. I’m thinking it may be best for me to combine eating out and groceries and just know X is the amount I have to spend weekly or biweekly. I’m still tweaking things with my budget and trying to properly allocate the funds. I also ended up moving Car & Travel to my everyday wallet. I have to renew my registration and it’s time to take a little trip.
If you’ve made it this far how much are you spending on groceries and eating out? Leave a comment!
Also check out my other Finance Friday post Debt Snowball and Biweekly Budget!
Leave a Reply