Basics in Budgeting and Management of Money

We have been discussing a lot of way on how to resolve financial concerns and paying off debts. Reiterating here some ways in handling our finances and resolving debt problems… Some may experience different levels of financial mismanagement, from the basic debt problems to the near-bankruptcy, and to the declaration of bankruptcy.

> Assess Your Financial Situation. – Determine your living expenses, other expenses and your regular monthly debt payments. Compare your expenses with your monthly total income. Make sure you know exactly how much you owe.

> Sustain a Realistic Budget Plan. – Create a worksheet to write your monthly expenses. Write where and what you are spending the money for. These expenses can be fixed such as: housing, utilities, child care, loans, etc.; or flexible expenses which vary from weeks or months (unexpected emergencies, medical bills, restaurants/recreation-health activities/entertainment, etc.). Once you see where you are spending funds at, you will have the ability to take control on where you will redirect your expenses at, thus, ability to take control of your finances.

> Recognize the Difference Between Wants and Needs. – Create a healthy budget by taking care of your NEEDS first – food, housing, clothing and transportation. Money should only be spent on WANTS after the needs have been met.

> Never Allow Expenses to Exceed Your Income. – Do some adjustments on your budget according to your income. Evaluate the importance of expensive luxuries such as cell phones, cable TV, or even your designer clothes and other accessories.

> Pay Bills on Time. – Having and maintaining a good credit rating and avoid late charges, which could all the more put you in deeper financial trouble. If you are unable to pay your creditors, call and explain your financial situation and set up a reasonable payment arrangement.

> Use Credit Carefully and Wisely! – Determine what you can comfortably afford to purchase on credit by reviewing your budget. Don’t allow your credit payment to exceed 20% of your monthly paycheck. Pay more than the minimum on charge accounts. Add a few extra dollars to your payment. Avoid borrowing from one creditor to pay off another. Make a conscious effort to use paper (actual dollars available) not plastic (credit cards).

We may have a lot of options in making your financial and funds management work; BUT, it will only YOU who will determine all these plans become a success.

Act on it, make it a habit, and be aware of your spending, at all times.

Read More