Do you know where you stand financially? Most people have an idea, but they rarely see the whole picture. Your budget shouldn’t be like a jigsaw puzzle with missing pieces. You can’t get a grip on your money unless you see where it’s slipping away. Those missing pieces could be hidden spending habits that are preventing you from reaching your financial goals. So, how do you get a grip on your money?
First, get your financial records in order.
Start with your income. Take your last pay stub for December, and/or your W-2, and break your income down into monthly segments. Don’t include commissions or bonuses because these change from month to month. If you’re paid strictly on commission, take the lowest monthly figure from last year and use that as your monthly estimate. Most expenses are billed on a monthly basis, and if you overestimate your monthly take-home pay, you could come up short.
Next, list your expenses. Start with expenses that are billed monthly, then search for expenses that are billed annually or bi-annually, like your driver’s license renewal, car registration, or long term care insurance. Finally, try to estimate your cash expenses as closely as possible. Your cash expenses are categories like groceries, restaurants, clothing, or gifts. They fluctuate from month to month, and can be hard to track. Continue reading ‘Get A Grip On Your Money’ »