Alright so you may be saying “What are you talking about?”  When I work with people to help them get control of their money, one main issue usually surfaces: we are spending more than we make and we have no idea where it is going. 

The first step to fix this problem is to create a plan that includes totaling income and how we are going to spend it.  So here is the challenge for you: 

Start by figuring out how much money you actually make. This includes how much money do you bring home and have to spend. This number is not your salary. Remember, you do not get to spend it all; we have to pay Uncle Sam, insurance and many payroll deductions before we get our money home.

Once you know this number, start spending your money on paper before the next month begins.  Limit the time frame to no more than a 4 week period. List out all of your expenses including rent/mortgage, utilities and auto expenses. Make sure to take care of your “4 walls” first: Giving, Food, Shelter, Clothing and Transportation.  This is a must before you do anything or pay anyone else. 

After creating that list it is time to think through the month and decide how and where you are going to spend the rest of your income. These items could include: eating out, gifts to be given, entertainment, savings and many other expenses that you know will occur this month. The goal is to spend every dollar on paper and on purpose before the month begins. This gives every dollar a name.

It’s important to remember that the first month you begin to work your plan, it likely will not work. Do not get discouraged. Keep at it. Developing a budget that works for your family is a process. Each month you will review what worked and what didn’t and then make the necessary adjustments. By the third month things should be running smoother. Now it gets exciting. Because, once you gain control over the budget, real progress can be made toward your financial goals.

So get started and if you have questions or are unsure about what adjustments to make send me an email @ jeff@TheFinanceCoach.net or call me 317.858.7270.