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     Getting Your Financial Act Together

If you want this to be the year where you finally STRAIGHTEN out your finances, read on. If your finances have been sinking you deeper and deeper into debt each month, here are some ideas to help you get your financial act together.

How much of your hard earned income falls through the CRACKS each month? How many dollars are frittered away on a candy bar here and an espresso there? If you are like most people, you have no idea how much money each month falls through the cracks. The best way to solve this problem is to start DOCUMENTING every expenditure you make. Whether it's a cash, check or credit card purchase, you need to jot down what you spend your money on, each and every day. This includes those $1.00 candy bars.

One way to track your spending is to take several index cards and label them with different budget CATEGORIES. Every time you spend something, jot down the purchase on the appropriate index card. At the end of the month, add up the purchases on each card and see exactly where your money has gone. From this, you'll be able to see how much money you've spent on NONESSENTIALS. The money falling through the cracks each month can then be redirected towards savings or paying off debt. You can also track your spending instantly with palm software or on your computer with automatic downloads of all banking and credit card transactions.

Time is a limited resource. We have 24 hours in a day, 7 days in a week and 52 weeks each year. Who and what determine how we spend our time? How can we maximize the time we have? Money as well is a limited resource. We may have a weekly or monthly paycheck. We make so much money each pay period, get taxed so much and take home so much. What do we do with the money that we take home? How do we spend it and how can we maximize it? If you know your values and what is IMPORTANT to you and let those values control your time and money, you are the lucky few. For the rest of us, we allow CIRCUMSTANCES and situations to control our time and money.

Once you know where your money is going, compare it to your list of values. What's important in your life? Where do you want to spend your money? What areas of your budget will you need to SACRIFICE to have enough for the other areas that are the most important to you? Now add in the time aspect. Everything you buy costs you not only money but also time. "Things" take time to assemble, repair, maintain and use. So before you purchase something that you might not really need, ANALYZE it from the standpoint of time. Is the time this product requires worth the trade off? If the answer is no, then don't buy it.

Allow yourself to SPLURGE every once in awhile within reason if it helps you make your budget more fun and realistic. You probably won't stick to your plan very long if you are too hard on yourself.

Each month, focus on a different area of your budget to SHAVE off a few dollars. If your monthly budget for entertainment is $100, try to reduce your budget by 10 or 20% this month and then remain at that spending amount each month until all your debts are paid off. Freeing up cash in each area of your budget is one of the easiest ways to find EXTRA money to pay off debts or put towards savings.

If you want to develop the spending patterns of the rich, you will always allocate some money each month towards SAVING and investing, no matter your level of income. This must be done before you pay your personal bills and is one of the most important habits you can develop. To guarantee that you never miss a month, bypass your checking account and have the money DIRECTLY deposited into a mutual fund, money market or savings account each and every month.

Practicing these steps can do wonders for your finances and in helping you eliminate debt. Track your spending to include every dollar of income that you receive and you will be well on your way to eliminating bad debt and achieving financial FREEDOM for yourself.


Doris Dobkins is a Money Saving Expert and publisher of the free weekly ezine $mart Money New$. To subscribe, send an email at . You may visit her website at www.creativefinances.com.

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