Striving for financial security and independence may seem like a daunting task. Let’s face it, just thinking about money and budgeting can bring cause of dread and despair. Develop a plan to help meet obligations head-on and tackle any financial emergencies that may crop up. Keeping track of your finances and monthly obligations can help you keep your head above water, reduce your daily stress and keep you and your family on track to a secure financial future.
Add up your fixed monthly expenses. Include monthly obligations such as your car payment, mortgage payment and insurance premiums. List these expenses on a piece of paper or use a computer spreadsheet program to keep track of expenses. Note the creditor name, amount due and payment due date. Add up all fixed expenses and note the total cost of these expenses.
Calculate your variable expenses. List variable expenses such as utility payments, groceries and other necessities on the spreadsheet. Use the same format and list creditor name, estimated amount due and payment due date. Leave the due date blank for variable expenses such as groceries and car maintenance. Estimate these expenses by reviewing previous records such as bank statements and past utility statements. Take into account seasonal expenses, such as an increase in heating or cooling costs.
Keep track of your monthly income. Include monthly wages and income earned from investments in your calculations. List the amount of the income and the date of receipt.
Set aside enough money from each paycheck to cover your monthly obligations. Keep some money aside for savings and emergencies. Aim to create an emergency fund equal to six months of expenses.
Use a calendar to keep track of income and expenses. Highlight the days you receive income on a calendar. Complete this for a six-month period at a minimum. Go down the list of expenses and place each on the calendar. Note the amount you expect to need for variables such as groceries, dry cleaning and birthday gifts at the beginning of the month.
Pay attention to your discretionary spending. Include a predetermined amount of discretionary income in your budget. Allow for dining out and family outings if your income allows. If you find your income barely covers your expenses, find ways to cut back. Give up your landline telephone in favor of using a cellular phone for all of your calls. Start clipping coupons. Use the money you save to fund entertainment costs.
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