Who says they don’t have an accounting or financial bone in their body?
Whether you know how to balance your bank statement, pay your bills on time, pay out your credit cards so you don’t accumulate high interest rates, or whether you get nauseous at the pile of mail stacking up on the counter, the bottom line has been effected and the balance tells the story!
Creating a balanced budget has it’s benefits.
The most important one is to prevent debt creeping into your life until it chokes you!
Even though this may bring you satisfaction or a sense of dread, the truth is that underneath you have a problem that needs to be addressed because both styles of financial acumen can still accumulate debt if not previewed.
And that’s okay, because as life unfolds, and as things become more and more expensive, it makes sense you need to adjust to the flow. Sometimes it takes longer for some to adjust while others can shift effortlessly.
That’s why you need to learn to look at your financial situation way more often than you do. And when you do look at it, you must open your eyes at the reality instead of turning your back.
Because what happens is, debt creeps up faster than you imagine.
Debt creeps into the night, into your dreams, into your relationships, into your lifestyle, into your credit ratings and into your subconscious until it takes over your entire soul.
Balance Your Budget
That’s why it’s important to learn this one simple skill – balance your budget!
The government does it. Companies do it. Families with more money and less money than you do it. Ultimately, people with manageable to no debt have done it for decades and they reap the rewards in the end.
So what’s a balanced budget?
Simply stated, it’s managing to keep your income and expenses at about the same level.
You may think it’s too difficult to monitor. Rest assured, it will be challenging to begin with, but here’s a quick lesson to get you started.
Go to that pile of bills and open them all.
Add up how much you owe.
Then look into your bank account and see if there is enough money right now to pay those bills.
If there is, you can balance. If there isn’t, please don’t go into further debt, but instead, ask for help at the utilities companies or the bank to help you make some consolidation decisions to catch yourself up.
Normally, bills arrive once a month. Food shopping is probably more frequently. As any rate, estimate how much you spend each week and multiply by 4 to get a monthly food bill. Add this to the current bill total.
Add some clothing allowance you absolutely require and now, this accumulated total will always arrive on time, every month.
You need to know this total intimately.
Here’s the next step.
Write this bill total down on a big piece of paper and tack it up on the the fridge, on a bulletin board, on your computer, in your smart phone, as a screen saver on your computer, at work, in your car, and tape it up on your bathroom mirror. Now add some basic food costs, gas for travel (or other transit costs) because you have to get to and from your work.
That is unless you are fortunate enough to work from home, so your expenses are slightly different.
Once you get your bank account up to the level you can pay these monthly, you are balanced. If there is any monies left over, of course, treat yourself. And as you get better and better at balancing your budget, you may begin to have left over income that you can save and invest for your future.
Eventually savings will be added to the monthly total and then you write that figure down and tape it where you can see it!
Maybe it doesn’t sound much of a budget strategy, however, if you don’t begin, you will fall behind like over 80% of the general public. The debt ratio is outrageous and people struggle.
When people stubble, they get frustrated, upset and this low energy affects relationships and everything slides down.
It’s not the difficult. A pen, paper, calculator and a piece of tape!
And remember, you matter and great job today!
P.S. Here are 2 pdf files to help you get a handle on your expenses vs your income. Print them out and use them in the manner of honour and clarity where you stand right now in your financial situation.