See it in black and white

Most people truly have no idea where their money goes.  They spend, pay the bills and then wonder…. ‘where did it all go’? …. So, get paper and pen.

Make a list of all your monthly expenses….every single one of them.  List according to priority.  Any outstanding debt should be paid off as soon as possible.  Now, make a second list of all your annual expenses… such as insurance, life, home, car, excise, RMV expenses, birthday, anniversary, holiday gifts etc.  Don’t miss any.   Add them up.  The total should not be more than your take home income.

Once your outstanding debt is paid off, begin to save.  Savings should now be listed first in your budget….’Pay yourself first’. it’s an ‘expense’ which is, in truth, a gift to yourself.  And you need to get in the habit of saving.

If your expenses are less than your take home pay, kudos to you!  Keep up the good work!

If your expenses are more than your income…..common sense…..you are overspending!  You are living beyond your means.  It’s time to take a hard look at exactly where your money has been going, and make a serious commitment to cutting back, going on a spending ‘diet’.

It’s time to start backing off on incidentals… shaving unnecessary spending.  This will be easier than you think.  Really.  Start by listing things you can cut back on – even here and there, or maybe completely. Examples:  Make coffee at home 3 times a week, dine out once a month instead of once a week.  Cut out vending machine food.  These are starters, but you’ll come up with more.

Seeing it all in black and white, and where and how your money has been spent, will help get you on track to keeping your financial health in check.  It’s a matter of continued discipline, and it’s easier than you think.  You’ll be very happy you did.

Having your financial health in order relieves stress in your life.  Knowing that, should an emergency arise, you have the money already set aside to handle it.  You’ll also be able to enjoy the lifestyle you chose when it’s time to retire, because you’ve been saving for it all along.

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