Life does not get easy, in fact many feels they must keep up with their friends and neighbors to be successful. We tend to feel the need to impress those who couldn’t care less about our situation – they are busy trying to manage their own. Here are 4 easy personal budgeting methods to use right now that helped me move forward when I was at my lowest for the third time.
1. Identify What You Have Right Now
The first thing you need to do right now is pull up all your bank accounts and find out what the balance of each and make a
list, then add up the total of all. Be sure to include any cash or change in your purse, a bank or just in your home. It is essential to identify what you have right now available before you go any further.
It is impossible to pay bills without knowing what you have at all times, this is how one would get deeper in debt and fall back onto their credit cards in order to have whatever it is or pay with funds you don’t own before they are due – that essentially means using your credit cards to pay your bills.
So now, step away and get going making your list identifying what you have right now and come back to method 2 after.
2. Do You Have Any Current Bills Not Paid this Month
Okay, now you know what you have. Are all your current monthly bills paid and up to date? Don’t look at credit cards and other debt payments until you have paid your regular monthly bills. What bills are left that you need to pay this month? You see you have to make sure that you have certain needs met before you can work on paying off debt. These things include a roof over your head, warmth and comfort, and food in your tummy. Once those are satisfied, you will know how much you have available to put towards your debt.
Now take a few moments and make a list and total up any current bills not paid this month. Once you have done that, come back and move onto method 3.
3. List All Your Debt Smallest to the Largest
Now that you have summarized what you have available, and know what you have left to pay off for the current month. You need to make a list of all your debt – itemize all your credit cards and loans from smallest to largest. Don’t incluide mortgage and student loans here, as they should be listed with your current bills as those must be paid every month without fail.
Make sure you include the column and list the minimum balance that must be paid to stay current. You will be paying the minimum for all accounts accept the first one, which is the smallest total balance. After you have paid all the minimums you will return to the top least balance account and apply additional funds available until paid off. Once you have paid the smallest, you will cut the card and send it back with letter requesting to close the account at your request.
You will then move onto the next lowest amount and repeat until all debt is paid up and you have one card left to hold onto for emergency only. In my case here, I intend to keep the Ci ti card as they will never charge me any interest.
Stop! Look! Now Set A Goal!
Well, now STOP! Take a good look at what you have available and use it to pay some of your current bills left for the month. Once you are current – then move to the debt chart and start at the top paying more with only minimums for the remainder of the debt entries.
Go one step further and make a written goal you can look back on. Here my goal may be that once I have my current monthly bills paid and up to date, I will pay off the first two debt cards by Christmas.
Now that you have an intentional purpose for your income and how you are assigning your dollars, you will begin to see progress in your finances and can start celebrating certain milestones. To help you meet your goals, just think what it would be like to have no debt and all those funds going into savings every month.