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Set a financial goal. Be sure the goal inspires you. Without a meaningful reward, it is nearly impossible to stick to a money management plan.
Track your expenditures for at least a month. This means cash, checks, debit and credit card transactions. Before you plan future spending, you need to know where you currently spend your money.
List all NON-monthly expenses, for example: property taxes, certification classes, gift giving, holidays, and vacations. Some of these expenses will occur quarterly; others occur bi-annually, or annually. After you have totaled all of these expenses, average them out per month and add this figure to your monthly spending.
Determine what income will be coming into your household. Plan for one month rather than a longer period of time. Once you have mastered the monthly planning process, then plan for longer periods of time.
List all sources of income| Wages / Salary Business Income Bonuses or Commissions Alimony / Family Support |
Dividends Rents Due Annuities / Pensions Interest / Gifts |
Project / plan your expenses for the month in each category. Base your projections on the tracking you did during the preparation period as well as the need level for each category. Be sure to scan your calendar for important events that may require additional expenditures.
Recognize that you choose most expenditures. Yes, some expenses are mandatory. But after tracking your expenses, you will be surprised by how many items are discretionary.
Don’t forget to have fun! The first thing most of us do when we plan is to cut out all the fun. But if you don’t have fun in your plan, you will find it difficult to stick to it.
Compare your income to your expenses.
If income is higher, then decide, in advance, where to put the excess.
If income is lower, start cutting expenses, not to the bare necessity level but to what is reasonable.
Consider ways to increase your income. Possible ways of increasing your income may include starting a business, having a garage sale, selling items you are not using in a consignment store, working additional hours at work, taking on a part time job, selling some of your creative projects, or trading for a product or service you would normally have had to pay for.
Compare reality to your projection / plan. Continue to track your expenses so that you are not spending more than you have planned.
Adjust your spending accordingly. If you notice you are in the red each month, then getting real about your spending is critical.
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Pleasant Hill, CA 94523
(925) 682-2005 counseling office
(925) 252-1231 fax
E-mail: joan@silvassolutions.com
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