Posts Tagged ‘debt’

Wouldn’t it be great to get paid without the work or hassle of getting a different job or a second or even third job? Well there is a way to have more money without getting a different or a second job. That does not mean you will have more money to spend in the short term, however, if you work the plan you should have more money in the near future. And yes, the word near is relative to each individual.

Here are four steps to increase your monthly funds.

• First we need to find out where our money is going. That means making a “cash flow plan” also known as a “BUDGET”. For this step, some people use an excel spreadsheet, others want a fancy software program, but most will do great with just a pencil and paper. It really doesn’t matter what you use. What matters is that you use it to develop a plan that works. Since everyone has a pencil and paper, lets start there. At the top of your paper, write down your actual take home pay for the month. Then list all of your fixed expenses such as rent, utilities, car payments etc… Next list your flexible or discretionary expenses such as groceries, dining, clothing, auto fuel, etc… Finally, list all of your debt payments (minimum payments only at this point). Total your expenses and subtract from your income. If your income is greater than your expenses, fantastic, advance to step 2. If your expenses are greater, then we need to examine our expenses and determine where we can trim and temporarily eliminate some spending.
• Quickly save a $1000 emergency fund. You may need to be creative to fund your emergency fund. Have a garage sale, sell items on Craigslist, and once again, identify areas in your budget that can be trimmed or temporarily eliminated.
• Start to eliminate debt. List your debts from smallest to largest (do not include your house payment in this section). If you are current on all of your debt payments and you have $1000 in your starter emergency fund, then all extra money can be applied to pay down your debt.
• Develop and use a “Cash Envelope System”. Put away your credit cards and debit cards and use cash on discretionary expenses. For each cash category take an envelope and write the name of the category on the envelope. Place the cash for that category in each envelope. Typical categories that you may want a specific envelope for are: groceries, dining, entertainment, clothing, gifts, and hair-care (or dome-care for some of us).

Having an emergency fund to pay for unexpected emergencies and eliminating the drain that monthly debt payments place on your monthly budget will increase your available funds. This is essentially the same as giving you a pay raise.

You may find these steps somewhat overwhelming. Or, you may be procrastinating on getting started. If this happens, give me a call and let’s see what we can do to get you over the hump. I can be reached at Jeff@TheFinanceCoach.net or 317.858.7270. Also, check out www.FinancialUTurn.info to register for our free seminar on Tuesday, June 21st.