Become Master of Your Financial Domain
By Shannon M. Medisky
A few years ago, after a long bout of worrying about money, I came to the realization that it’s expensive to be poor. If you don’t have the money to pay bills on time or at all, you incur expensive late fees and higher interest rates. A lack of available funds to purchase items when they’re on sale, leave you at the mercy of when you do have money and whatever the purchase price may be at the time. If you don’t have the extra money to purchase items you regularly buy in bulk, you’re left paying a premium for purchasing the same items at a higher cost in smaller sizes. Honestly, it’s expensive to not have money.
Be that as it may, how can the average Joe or Joanna climb out of this financial pit? Believe it or not, it’s easy. Instead of worrying on how you can bring in more money by working harder and stretching yourself even thinner, refocus your thoughts and energy towards becoming master of your financial domain. Begin taking better charge of what goes out that you work so hard to bring in. Keep reading to find out exactly how.
You can’t control what you don’t know, so begin by figuring exactly how much money reliably comes in each month and how much goes out. Don’t worry about how the two figures measure up yet, concern yourself only with getting the two most accurate figures for both. Notice, too, that I said money that reliably comes in each month. There’s no use in counting money that you can’t reliably count on. Doing so could land you in a heap of financial trouble.
Getting an accurate picture of the money that goes out can often be a bit more tricky. If you find yourself wondering often, “Where did all that money go?” Now’s the time to find out. Begin with the obvious, monthly bills that have set payments and due dates. Next, move on to the bills that have fluctuating minimum amounts due and use the highest previous amount paid. Create an itemized list so that you can clearly see your monthly financial obligations. Don’t forget, too, to factor in payments that occur regularly, but may not come due each month such as auto or homeowner’s policies. While you might not have to pay these premiums each month, they must still be factored in as an ongoing expense.
Ah, the best for last, the expenses over which you have the most control. Granted, these are often necessary expenses, but the dollar amount spent can often be directly controlled (at least to a certain extent) by you. Groceries and gas, for example, are all necessities, but you can certainly impact the overall cost of each by where you shop and how much you drive. A great way to place to get an accurate view of exactly how much you’ve spent on these items in the past is your checkbook. So grab your old check register and a calculator and flip through a month’s worth of spending.
Now if you’re like me, you’ve probably rushed to subtract your expense total from your income total. Again, if you’re like me, you probably noted a negative number staring back at you. Do not panic. Ignorance may indeed feel like bliss, but when it comes to your money, it most certainly is not. Getting an accurate picture of your financial situation is the first step to becoming a masterful manager of it. Now that you’ve got an accurate representation of each, put a moratorium on spending and check back next week to learn exactly how to get back in the positive and become a true master of your financial domain.
Photo credit: lorensztajer
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