HAPPY NEW YEAR!
Time to start fresh for a new year. This is a great time to evaluate your finances, and plan for a better financial future.
To do this you need information. You need to understand where your money is going to and take control of the flow.
1) To get started you need to make a complete list of your expenditures. This list needs to be complete. One of the biggest drain on tight budgets are small unaccounted for regular expenditures. Lunches eaten out, expensive brand morning coffee, etc. can chip away at even the best planned budget.
You need to completely list absolutely everything you spend your money on.
2) Evaluate these expenditures as unavoidable for example rent or mortgages, and avoidable like coffee from the expensive coffee shop, or monthly dress shopping expeditions.
3) Write down the your financial goals for the year. In order to stick to a budget you need a good reason. People who fritter away their money are those with no plan in mind.
4) Then with your goal in mind and your expenditures in hand look for those expenses that are not essential to your survival. Do you really need that expensive cup of morning java? Can you bring your lunch to work and not eat out? Ruthlessly list all things not essential to your survival.You will surprised how much of your monthly budget may be going to these non-essentials.
5) Pick the non-essential item(s) that you feel you need as rewards for your hard work. I call this "Sanity Money. " These are those little silly expenses you need to treat yourself. It might be that expensive cup of coffee or that lunch eaten out. Depending on how much you want to save, for a start cut all of these but one. Try a week without all your treats and see if you miss them.
6) Study you essential expenses to see if you can save money by refinancing debts. Some ways this can be done are:
a) Refinancing a mortgage or car payment for lower interest.
b) Moving to a cheaper location.
c) Getting cheaper insurance for health, car and home.
d) Moving high interest credit to new low interest cards.
e) Rework pay dates on badly scheduled bills to move them so you are not paying monthly late fees.
7) Try to see if there are ways to reduce costs on regular expenses. Use coupons, shop only for sale items, or buy at thrift stores.
Try this plan for two months a readjust as necessary. What you need is a plan you can stick to to better use your money in a more effective manner.