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What is the most important aspect of getting your finances in order? In past articles I've written about how important discipline, organization and sacrifice are to solving your money problems, but this all comes later.
For years I would write my bills down, figure my income and subtract the bills from my paycheck to see what was left. It was a real good start but by payday it was either forgotten or something would happen to mess it up.
It finally dawned on me that the way I was going about this wasn't going to work. I needed a different plan. Something that would make me understand the problem and help me come up with a solution.
What I came up with was a little surprising, at least to me. I had been trying to solve my problems without being willing to make some major changes that needed to be made. I really wasn't serious about fixing the problem.
After several years of counseling a lot of people about their finances, I've come to the conclusion that this is what keeps many people from overcoming their financial woes. There are exceptions of course. In some cases there isn't much that can be done short of bankruptcy.
Before you sit down and try to develop a budget or decide what your future plans are, you need to decide if you are willing to follow it through to the end. If you aren't, you will be just spinning your wheels. Here are few questions you need to ask yourself:
- Are you willing to do without the joys of what those credit cards can buy?
- Are you willing to have your family sacrifice as much as you do?
- Can you make the hard decisions that will be necessary?
Remember, this is only the first step, however, this is absolutely the most important. If you can't cross this hurdle then going to the next step is futile.
On the brighter site, if you are determined to get your finances in order, the rest is relatively simple. You first have to decide what it is that you want. Set your long and short term goals. Do you want to retire early, buy a house, send the kids to college? Will you need a new car in the near future? This will take money and it is absolutely necessary that you start saving as early as possible for these goals.
You next step is to set up a simple and workable budget. For many people living on a budget is like serving a life sentence in a maximum security prison. It doesn't have to be that way. The worst thing you can do is develop a budget that takes hours every day to manage. I have a developed a budget that takes a few hours to setup, just a few minutes on payday to keep up and is free for anyone to use. You can visit The Complete Budget and Bill Organizer at
http://www.homemoneyhelp.com/BBOonline.html.
While you are developing your budget you need to look for every way possible to cut corners but you have to be realistic. If you try to budget $400 a month for groceries then you need to make sure that you can make it on $400. If you can't then you have to set aside more.
Being organized is also an important aspect of money management. Assign one member of the family to manage the budget and bill paying. Setup your files so that you can quickly lay your hands on the bills, receipts, contracts, etc.
Deciding you have the willingness to get control of your money, setting your goals and developing a budget will all take an enormous amount of discipline to carry it out. I believe that if everybody applied the same discipline to their finances that they use to get up in the morning, go to work, take care of the kids and all of the other things we have to do everyday, money management wouldn't be such a struggle for some people.
Today, you don't have to do this alone. The internet has thousands of web sites that are designed to help. Most of them won't cost you a cent. However, it is going to be up to you to decide if you are ready.
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