Do Your Budget Plan to Resolve Debt Issues
Doing your budget planner accurately should not take too long. It would be easier if you gather all your bank and credit statements from the last 3-months. List all standing orders, direct debits and give you an accurate idea of what you spend.
For your grocery, gather all your receipts from the last 3-months, add up all food spending listed then divide by three to reach average monthly spend.
It’s always surprising to see quite how many things you spend on. Worse still is how much you spend on them. Yet there are always ways to save. It’s worth considering if you’re getting the best value for money, and can you cut costs?
Gather also your pay-slips to establish the exact amount you earn. Once you have the exact picture of your income expenditure, hopefully, you have triggered the end of which tells you the truth of your finances.
Providing you’ve been honest with yourself, it’s time to relax a bit – but it should not stop there. You need to work on reducing, adjust spending habits and create a reasonable spending pattern. Paying less for things means you have more money in your pocket to enjoy life more (and possibly save some for the future too!).
Spending more than what you earn may not immediately give you a negative impact, but it is a disaster waiting to explode! Worst is, you will end up borrowing more! You may feel that this is over-reacting but, when you are caught in spiraling debt – it touches every element of your life. Many people mistakes themselves about this, common thought is, “that doesn’t happen to nice families like us”. Well, I’m afraid even if you’re middle class, you’re not insulated from debt. In fact you’re in the prime category for debt crisis. It’s crucial to take the blinkers off. Far too many people in work with good salaries have bigger debts. If your non-mortgage debts exceed half your after-tax salary, it’s a real issue.
ASSESS YOUR SPENDING!
> Pain-free spending – Spending cut-back ensuring you live the same way but pay less. Don’t just look on the things like, credit cards, bill/mortgages. You can also save on childcare, taxes, etc.
> Re-budgeting adding the expected savings – Check your budget planner and incorporate expected expenditure based on expected pain-free savings.
> Cut-back on painful savings – You need to spend less, do less and sell things until you are living within your means. You need to start slowly to reduce on your spending, run through what you need. And if you have assets but are income burden, then consider flogging things you don’t really use, this will definitely help you afloat.
Working on one’s finances is quite tedious and tiresome. BUT, it is a must! At the end of the day, once you are good with your finances, life should be appreciated and enjoyed!