Solid financial management requires taking honest stock of your finances. We recommend that you assess your finances quarterly, every three months. And at a minimum, not less than once a year.
Taking the time to assess your finances lets you know if you’re on track to achieve your financial goals. If you’ve veered off track, it affords you the opportunity to correct course. Achieving any financial goal, whether it is to get out of debt, buy a house, save more, or take that long awaited trip to Bali, requires that you honestly and critically assess your finances.
Calculate Your Income
It is important to know how much income you have each month.
Calculate your income including your paycheck, income from a second job, child or spousal support payments, retirement income, social security benefits, pension income, or any other source of income, like sales from an Etsy store. When calculating your income, make sure to include all sources of income, including sources that may not come in on a regular schedule, such as book royalties.
Calculate Your Expenses
As important as knowing how much income you have each month, it is critical that you know what goes out each month.
- List your fixed monthly bills first. These include your mortgage or rent, car payment, insurance, student loans, utilities, cable, phone, and other regularly occurring monthly bills.
- List your expenses that vary month to month. These include food, gas, and entertainment expenses.
- List your expenses that occur throughout the year. These include property tax, car maintenance, tag renewal, birthday and holiday gifts for family and friends, etc.
For a true picture of your monthly expenses, add up all of these numbers and divide the total by twelve. This gives you your monthly expense figure that accounts for the large expenses that occur every year, but do not occur monthly.
For some people calculating their expenses proves a challenging task. If you’re having a difficult time figuring out where your money goes, track your expenses for a month. This will give you the opportunity to see what you’re really spending your money on.
The Nitty-Gritty: Income Minus Expenses
Subtract your monthly expenses from your income. If the number is positive, that is the money you’re saving each month. If the number is in the negative, you are spending more than you earn and it is time to take a serious look at your expenses. Living in the negative each month can lead to serious debt problems.
Review your expenses with a critical eye and find places where you can trim. Maybe you don’t need your cable tv because you have a subscription to Netflix or Hulu. Or, maybe you can make coffee at home and forego the $5.00 morning latte.
Create A Budget & Stick To It
Reaching any financial goal requires sticking to a budget. Getting out of debt, saving more, having a down payment for a house, all require establishing a budget and sticking to it.
There are dozens of free apps that can help you create a realistic budget. We encourage you to set realistic goals so that you do not feel deprived in the process of trimming expenses and reaching your financial goals.
Remember to take the time to review your finances regularly. Pay particular attention to your expenses. Cutting back doesn’t have to be difficult or extreme, but can make a significant different in how quickly your reach your financial goals.
Honesty Is The Best Policy
If you’re deep in debt, have fallen behind on payments, and your credit card debt is mounting, it is time to take back control of your finances. Take an honest look at your situation. It may be time to explore all of your debt relief options, including bankruptcy.
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Meet with us for a free, no-obligation consultation. Call us at right now at (912) 351-9000, or email info@BrazielLaw.com. We are here to help you evaluate if bankruptcy is the right choice for you.
We are proud to serve people in Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, and Ludowici Georgia.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.