July 7, 2013

Take Charge of Your Money ...Get Current Part 2

Follow along with me, one step at a time. I have never learned to control my spending. It has always controlled me. There seems to be more month then money. I have always been short and I never seem to have enough.

Where does it all go!
Sounds familiar?
Well, it does to me.
I've had it. It’s time for me to take control of my money instead of my money controlling me!
This time, I am determined. I was recently introduced to a system that if followed, promises to bring you peace and tranquility knowing that your bills  will be  paid and that you will even have some money in the bank. The steps are  divided into sections and topics, to help simplify  the process.
Starting with #1 and working your way through the
Easy Ways to... Take Charge Of Your Money
Let's Review How to Take Charge of Your Money Part 1   for those that have missed it:
  1. We went away to a quiet place so that we could think more clearly about what all the expenses were.
  2. We wrote down all of our monthly and periodic expenses.
  3. I  also disclosed the Secret to lowering your cable bill

Let's Begin:
    How to Take Charge of Your Money ...Get Current Part 2

Taking Charge of Your Money will NOT be easy. There will be times that you’ll feel that is live hasn’t been and isn’t fair however the long term goal promises to be rewarding.

Are you as determined as I am  to sacrifice and start building new habits today so that you can enjoy Living Life on 1 Income?

After writing down the all of my monthly regular and periodic expense, I found that I overlooked  a few  expenses:  ( Don't know why I overlooked  the expenses below, they come in every  month but writing them down has made me more conscious of them )
 car insurance 
light company and
gas company 
clothing category
The car insurance, light and gas company  expense will  be added into my regular monthly expenses and my clothing expense, (well we all need a new outfit or two every now and then)  I will categories as a  periodic expense, that I can build on and  will be able to purchase higher ticket items if needed.
This is about Living Life on 1 Income and I promise myself that I will live my  live to the fullest just frugally.
You can plug the miscellaneous expense to your periodic or your monthly expense.  Your Chose. I have decided to add the miscellaneous and the clothing expense to my periodical expense.
The amount that I have budgeted to put away monthly for these expense will not be large so  I figured if I can build on them periodically I can the purchase a nicer pair of shoes or  better quality kitchen towel set etc.
Let’ begin… Part 2

The objective for Part 2 is to know:
·         What you will need monthly to pay off all the month expenses including your monthly periodic expense(  yearly total /12)
·         Create a plan to get current with all your regular monthly expense.
By getting current on your regular monthly expenses, I am not referring to credit cards debt, student loans, and the money you borrowed from Grandma, or brother Bill. You will make a plan to take charge of those later but for now.
  1.   Time to figure out your monthly income.
You might want to consider not using your gross income (before taxes dollars) but your net income,(after taxes), when creating your budget.
For the Self-Employed person like myself:
This can be a little challenging, for the self employed. We don’t know, if and when a paycheck is coming in. That's why it is so important to budget and plan ahead.
As a self employed commission base person, my budget is created on a excel worksheet.  I go out about 6-9 months of expenses, when creating my budget.
The  most important expenses are at the top of each month (Mortgage, Gasoline, Food and Utilities)
When a commission check comes in, I don’t go out on shopping sprees. I just continue to work my budget. It's  the habit of spending that we need to break and we will, if we are determined to take charge of your money.     It will become less painful, as time passes. I promise.
Keep in mind, if you spend unbudgeted money from one expense, you will need to cut back on another expense. The goal is to pay things off and not create more or new debt.
#1 Rule!!!!
Do away with the use of  credit cards or getting into more debt.
You will never take Charge of Your Money, if you continue to accumulate debt.
When I started budgeting,  this was extremely difficult because I wanted to treat myself after  receiving a pay check  however, I have learned that the lost of sleep and worrying about how was I going to be able to cover my expenses, could have been prevented or lessened  if I would of Taken Charge of my Money.
When writing your budget give yourself some wiggle room if possible so your budget won't be tight and you won't want to stick to it.

This plan should be a good plan and can be adjusted as your life changes. You may need to review your budget monthly just to make sure you are a track and to see if anything needs adjusting.
******Bonus for the Self employed*****
When a month is over, I add another month, at the end. It forces my to think long term and because I am Living Live on 1 income, I am the one responsible and in charge of the money.
Example for the Regular Paychecks
Let’s say,
Your net monthly income is: $ 2000 a month and your month expense plus you month periodic expenses are $2,155
  •      What expenses can you trim back on?
  •      Do you need to get creative and sell something?
  •      How can you generate at least enough income plus a little extra to get current?
This is the hard part. You will need to get creative.
Things I have done to get current on my monthly expenses & bring in extra income have been:
·         Sold things on EBay, on  Amazon, on Consignment and in Tag sales.

At this Point... 

What you are doing for a moment and have a brainstorming session.
With this question in mind:  What can I do to bring extra income?
2.  If you are behind with any of your normal monthly expense, it is time to create a plan to  get current.
 I usually pay off the smallest amount first. It helps me feel a sense of accomplishment knowing that   I am getting things paid off .
Example: Tackling Past Dues and Getting Currents
I pay off the small first:
Pay off 1st- Light bill $75.00
Pay off 2nd- Gas bill $150 and
Pay off 3rd- Cable bill 185.
Cut down on Your Cable Bill by...  click here
Your budget should balance with extra income to get your monthly expenses caught up.
If it doesn't Get creative!
Next time, on Living Life on 1 Income 
                                                         The  Mini Emergency Fund

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