Steps To Regaining Control Of Your Finances

You can use money in three basic ways. You can save it, spend it, or give it away. It is wise to do all three at together and it is called manage it.

Short-term savings is for goods and services that you want to purchase in the near future (e.g. movie tickets, CD’s, haircuts, games, clothes).

Long-term savings is for goods and services that you want to purchase in the more distant future (e.g. education, car repair, special vacation). Adults use their long term savings for their retirement income.

The first thing you need to do is to make out a budget sheet. There is nothing worse than not knowing exactly where all of your money is going. If you don't know where it's going, how are you going to be able to be in control? You won't. So open up an Excel sheet and start putting down every single one of your bills and make sure to arrange them in order of when they are due. Also remember you can pay some of your bills up to two weeks late before you get charged any kind of late fees, however, as for credit cards, never do this, always pay them on or before their due dates. Once you have all of your bills on your budget sheet then figure out which paycheck will pay which bills and during what time of the month.

Great! Once you know exactly how much extra income you have each month, you can start planning what you would like to do with it.

After you have regained control of your finances you might want to consider setting up a savings account. This way you can take any or some of your extra money and put it away in your savings account right from your paycheck. Doing it this way will make it less tempting for you to avoid putting it in the account and spending it instead. This is a great way for you to sock some money away for a vacation that you might like to be able to take in the near future.

An income deficit is actually very common, but a personal budget can help you to correct this. Once you know where you spend your money, you can decide which expenses can be reduced or eliminated.

Also write down what will happen if you fail to make this change. Will you have to file bankruptcy? Will you lose your house? Will you be miserable and depressed and disappointed in yourself?