How To Get Your Finances Under Control

I'm no financial expert - but, to tell the truth, I don't think the people who call themselves financial experts really know all that much. They surely have been dealing out bad advice for a long time!

Even though I'm not a financial expert, I have managed to crawl my way into a very comfortable lifestyle. I'd say it was about 80% hard work and 20% luck.

Here is how I did it:

Start by setting a budget.

While it sounds like the same old advice that never worked before, it will work if you approach the idea of a budget as a means to help you achieve your goals. This budget isn't designed to make sure that you pay your bills (and have no money left to enjoy), this budget will ensure that, with a little hard work, you will be able to afford those little things that make life fun.



  1. Figure your monthly income. (After taxes)


  2. Gather three months of bills, add them up and divide by three to calculate your monthly fixed expenses such as rent, utilities, and car payment.


  3. Add together three months of groceries, clothing, credit card expenses, medical bills, and spending cash.


  4. Divide by three and add the result to your monthly bill expense total.


  5. You should now have a sheet of paper that lists what your average monthly spending is. Make sure that each expense is on it's own line because we are going to evaluate each line to see if we can find ways to cut expenses in the future.

  6. Look at your utility bill. Does it fluctuate? Most utility companies can average annual bills into 12 monthly payments so that customers aren't faced with higher costs during the winter months. If you don't already take advantage of this, call your utility company to see if they have the program. It does help to know how much the bill is each month.


  7. Do you have a cell phone and a land line? Can you live without the landline? Most cell phone companies charge under $10 to add a second phone to your account. Much cheaper than a landline with many more features.


  8. Look for more ways you can cut back spending. When I did my budget, I cut my grocery bill in half. I wasn't happy about it. I spent a year eating a lot of Mac and Cheese because it was cheap. But it did enable me to pay more on my credit card so I could climb out of that hole. (I'll post my "credit card help" article in the future).


  9. This is the tough part. If your expenses exceed your income, consider a second job. I actually worked three jobs to get on my feet. I worked the factory job during the day. I bartended three nights a week and found a part time job that allowed me to bring work home. Do what you have to do to pay the bills.


  10. Now we have our list of expenses and our list of income. We've made notes on where we can cut back on our expenses. Post that list somewhere. I posted mine on the side of the fridge -- not the front where visitors could see it.


  11. Find a place to put your bills when they come in. I used a box in my cabinet. I filed my bills in the order they were due.


  12. Decide how often you are going to pay your bills. I paid mine twice a month because there were weeks that the size of the bill was higher than the size of my paycheck.


  13. Sit down at the same time every week and organize/pay bills. Yes, I said every week. Even if you pay twice a month. My time to sit down with my bills was Thursday about 9:00 PM. On weeks that I was making out checks, it took about 20 minutes. On weeks that I was not writing checks, it took about 10 minutes. I simply reviewed what was due and made sure I was on track.


  14. OK, so you do all these things. How long will it be before you realize that you are not struggling financially anymore?

    That depends on several things:

1. How deep you were in debt.

2. How well you stuck to "the plan".

3. Luck. My luck was pretty good. I had one major hurdle I had to jump. My car gave up the ghost and I was forced to sell it to the scrapper and buy a new car. I chose a ten year old ugly beater that ran like a dream.


It took me one year of working three jobs and sticking to "the plan". The second year I was able to quit one job and work just two jobs. The third year I was able to manage my money on just one job. Yay!

Is it worth it? Yes!

Can you do it? Yes!



Books that can help:

Personal Finance For Dummies, 5th edition

The Difference: How Anyone Can Prosper in Even The Toughest Times

Software that can help:

You Need A Budget Pro - Personal Finance Software Program

Quicken Deluxe 2008



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1 comment:

Neko said...

Great tips! I've had a budget since I moved into my first apartment many, many years ago. Then, I had a journal and divided the pages into expense catagories. I recorded and subtracted everything I spent from the appropriate catagory and each paycheck I added in the amount I had budgeted for that catagory. Nowdays I do about the same thing except I use Quicken to keep track of everything. I know my Mom does the same thing using a simple spreadsheet. Always, at the beginning of every year I add up what I have spent during the past year in each catagory and divide that by the twelve months in a year. Then I think about whether my expenses might go up in that catagory during the coming year or if I can find a way to decrease my spending. Then I set up my new budget for the coming year.

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