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Now is the time! It is the time to schedule an appointment with yourself to review the state of your finances. If you are married, invite your spouse to the appointment. It is time to come face-to-face with yourself and your finances. You need to understand where you stand and to examine your situation.
If you need to find documents to help you build your Planned Spending Program (formerly known as – Budget), go to https://secure.budgettracker.com/login.php. After you sign in to the free website, register, go to My Budget and then click Budget Wizard. This will guide you through some, but not all of your expenses.
Taking a direct approach may be scary and it may take all the effort you have. However, until you know your financial situation, it cannot be resolved. So start by making an appointment with yourself and do not call in sick.
What do you do at your appointment when you meet with yourself?
1) Make a list of all your debts, from the smallest to the largest. Create a spreadsheet, listing the Creditor name, account #, monthly payment, payment date, balance owed, and interest rate. You can do this on a blank piece of paper. It doesn’t have to fancy. It is just for you.
2) Record that information in your Planned Spending Program (Budget)
3) Go through your check register. Look through the last 3-6 months; list your monthly expenses and the average amount. Of course, mortgage and auto payments do not vary; but utilities and groceries, clothes, cash & spending, dining out and entertainment will all vary. Record the average.
4) Make a list of all the expenses you do not pay every month. Include real estate taxes, and homeowners insurance if they are not included in your monthly payment. Keep going. List all the other things you do not pay each month. Here are some ideas. Prescriptions (may or may not be monthly), Auto Repairs & Maintenance, Christmas, Easter, Hanukkah and other holidays. Don’t forget Valentine’s Day, Mother’s Day, Father’s Day, Halloween, Thanksgiving, birthdays, and your anniversary. Remember to save for vacations too. Did I mention weddings and baby gifts, charities and events, club memberships, annual dues, school programs and expenses and make certain to include your Emergency account? Yes, you need to save for all of these expenses. Save now so that when you need to pay one of these bills or an expenses you know you have it in your savings account/money market account.
• Total up the annual amount. Divide it by 12. The result is the amount you need to add to your monthly expenses. You can list the amount as one line item on your Planned Spending Program (budget). List it as “Non-Monthly Expenses”. That amount needs to go into a separate account every month, no exceptions.
This is one of the easiest and greatest ways to get your Planned Spending Program under control.
5) Take a break. Breathe deep. Come back in fifteen minutes. Congratulate yourself for getting this much done already.
6) Now that you are back, total it all up. Do you bring home more than you spend?
If the answer is yes, you are on your way. Now it is time to decide if you want to carry all that debt. Think of it this way. The total amount you have to pay creditors each month is taken from your future income before you even see it. Meaning, we pledge our future income to the creditors. We are their servants. We work for nothing until we make more than the payments to our creditors. Personally, that makes me angry. So angry, I cannot wait to get those loans paid off.
If your expenses are more than your income, see if there are places you can make reductions. Be real; almost all of us can live on less. It is just a matter of doing it. Saying we can live with less and succeed in doing it are two different things. This time you have to prove it. If the first round of reductions is not enough, go back through and perform surgery. Does that do it? Can you succeed now? If not, it is time to look for work. I just finished spending time on the Target website. They have positions available today. Not cleaning the toilets jobs either.
I know I know you are tired after you finish working your regular job. But this is serious. Your finances need your very best efforts. If you need to go get a job, go get a job. Don’t make excuses. Go do it. There are jobs available. Don’t rationalize. Go do it.
Calculate how long you will have to keep the job and know how much extra you have to make each month. If straightening out your finances and being able to have financial freedom again is a priority, you will find a way to keep going even while working the part-time job. It is all up to you though. No one can make you do it. Maybe you are thinking you want to file bankruptcy because it will take a while to get things straightened out. That is just another instant gratification technique. I have heard hundreds of people tell me they wish they had not gone bankrupt. They are saddened that they did not look for had a different path to work things out, even if it took a long time. They will have to carry that heavy load the rest of their days.
Stop whining. Go out and get that part-time job. Yes, I know there is a recession but there are jobs available.
After you have secured the part-time job be sure to use the money to retire debt. Not just one debt. All of them. After you pay off the smallest debt, take the payment amount and pay it onto the next smallest debt along with the minimum payment you have been paying. Continue that until they are all paid.
Apply yourself. Do not give in to instant gratification mechanisms. Planning the work and working the plan will help you be a content, happy and joyful person in the future.
Lastly, do not forget to keep using the Planned Spending Program (budget) the rest of your life. Once it is in place and you are comfortable using it, you can easily use it all of your days. It will become second nature.
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