UPDATE: The Breakdown: Defeating That Pile of Billls

As I wrote about in my previous two posts, tackling your finances after a major life interruption can be very intimidating. I admit, I'm extremely intimidated and frustrated with myself for letting all the work I did previously disappear and ending back where I started.

So, I sat down with my notebook and my piles of bills and called the necessities: electric, gas, cable, water.

To my surprise, things weren't as bad as I thought. I woke up today with much less anxiety and it's because I stopped avoiding the mess and dealt with it head on. I still have medical bills and some taxes I need to take care of but home is taken care of.

I wanted to share my small victory. This is what this financial journey us about. Small victories. Small victories add up.

Next, I am planning to address my budget...or lack of a budget....

Until next time...

The Breakdown: Defeating That Pile of Billls

Breaking out of your funk can be intimidating.

In my last post, I outlined what needs to be done. I realized simply following those tips is way easier said than done. I realized this when thinking of my own situation. I'm intimidated. If I am, I know you are too. To lower some of that anxiety, I have decided to break down each step more. More information is always better than less. My hope is to let us all know...we got this!

I have been sitting looking at my pile of now opened, sorted, and written down bills and am feeling intimidated. I'll admit, this pile is scary. Knowing that everything in it needs my attention. Knowing that I owe money to each of those bills. It's all intimidating.

So, let's start at the beginning. Opening those bills.

Grab that pile and take a seat. Make piles. Trash. Bills. Other. That's all you have to do, first. Even if you know it is a bill, open it. Open everything.

Throw the trash out, that's probably a huge part of your pile. You have bills and other important mail left. If you aren't too overwhelmed (take a break if you are. Even if you come back to it a day or 2 later.) get a notebook (a notebook specifically for getting your finances back on track) to make notes on each bill. Write down how much you owe, contact information, any other important information. You can put them in order by when they are due or by how much you owe, but make sure you make a list that makes sense to you. This is the start of getting organized.

In your finances notebook is now a list of things you need to address. You have started your plan.

Next, we will look at your current spending to see where you can open up money to start attacking your financial mess.

Until next time...

Sometimes Life Happens...

I started this blog what seems like a lifetime ago. I wanted to share financial tips that I was learning myself and help people reach Financial Independence...but...sometimes life happens and what you have planned for doesn't happen. You get side tracked by a death or an illness or losing your job.

Things happen. Your life might be falling apart, but something you don't realize at the time is that you are most likely neglecting your finances along with what your dealing with. When you make it through your storm and try to return to normal you realize that pile of bills you have been ignoring are bills.

Now you are starting all over financially. You know all the right things to do. You remember the lessons you learned. You know what you need to do.

First thing you do...is open those bills. 

You can't fix the problem if you don't just jump in and see how bad it is. It might not be as bad as you think. Put the bills in piles according to what they are. Get a notebook and write everything down. Putting it on paper helps me to get organized. I'm a list maker. If lists don't work for you...find something that does. Piles. Baskets. Envelopes. Whatever works for you. 

Then put everything in order from the lowest to the highest. Plan to pay the little bills first.

Next, start planning. Look at your bank statements. Look at your current spending. Start a budget. Make a list of your expenses. The plan is forming now. You have a list of what you owe due to, life. You have a list of your expenses. 

I know it looks overwhelming, but you got this!

Now, go through your bank statement and put all your spending into categories to find out where you can cut back to pay off some debts. Make the categories: Essentials, like rent, car note, electric, etc.; Extras; like eating out and entertainment; Savings; you may not have a savings yet but you will.

Take your list of what you spend and breakdown things like eating out and shopping. You can cut these back or even out. You will be surprised to see how much you spending eating out. This category is usually much higher than people anticipate. 

Finally, you can make a budget. 

Budget for the Essentials first. Then, based on what you spend on food and your situation, add Extras to your budget. Your budget will change, so don't be discouraged when if you have trouble meeting every item on your budget. Overtime, your budget will change and eventually become something that you can, realistically, stick too. Make sure that you budget something to go to savings every month or pay day. I use an online savings account and have automatic deposits set each month. This way it is not something I have to consciously do.  

Don't let your current situation stop you from achieving a better life. One step at a time and before you know it your situation will have changed, if you develop a plan and stick to it. 

Until next time...

New Year, New You? Part 1

January 1st is here. 

Every New Years day we all set resolutions to change things in our lives that we don't like. We make resolutions about money, our health,  and our relationships that don't last more than a month or so. Then, we fall back into our old routine that didn't get us where we really wanted to be in life.

Do something different this year. Make your resolutions... life changes. And wait to actually start seeing results before you get discouraged and give up. Part of the problem with the way we make resolutions is the idea of the change is way better than the hard work and sacrifice it takes to actually be the person that we dream of.  

We are lazy. I know I am. I have never really tried hard at anything, in my life. I have done pretty well for myself considering I have never tried. I somehow managed to luck into a pretty comfortable life. I work and I live. I have gotten comfortable and stopped trying to reach the way that I sit around and think about life being.

Making changes is hard. But... One interesting fact about most people is that once we see the beginnings of results, we are more likely to keep up with the activity.

This being a personal finance blog, I am going to give you some easy tips to make changes to your finances that will help you keep your financial resolutions.

1. Write down 3 short term goals. These are goals that you set for 6-9 months. Like, saving enough to take a trip this coming summer. Write down 3 medium range goals. These are goals that you set for 9 months to 2 years. Like, planning for a wedding. Write down 3 long term goals. These are goals that will take longer than 2 years. Like, buying a house, child's college education, or retirement.

2. Write down your monthly bills. Everything you have to pay, every month. Then, make a list of everyone you owe. Friends, family, ...everyone. Go to Annual Credit Report.com and fill out the form to get ONE of your credit reports. (To do this read this.) Add those to your list.

3. Arrange the list so that your debts are in an order that fits your situation. The most important debts should be paid off first. Paying bills up to date is the most important priority. Then, use the Snowball Debt Method to pay down the rest of your debt list.

4. Make a budget. Give yourself a set amount for each expense each month. Don't go over that amount. Like, say you are only going to spend $25 a month eating out, $150 a month for transportation. The point of the budget is to start tracking your spending and controlling your money. When you make your budget, cut back on wants and focus on needs. Open a Mint account to organize everything.














This is going to seem like a lot but over the next couple months we are going to go more in-depth with each step. So, for now let's start with step 1. write down goals.


My goals:

3 Short term goals -
Pay off short term debt. Save for summer trip. Get frames for my degrees.

3 Medium range goals - 
Pay off credit card debt. Move. Save $5,000 in my Emergency Fund.

3 Long range goals - 
Pay off my car. Pay off my student loan debt. Buy my dream house and car.

What are your goals? 

Stay tuned for step 2 - organizing our bills and debts...

Why is it Tracking YOUR Money Important?

One of the first steps on your road to Financial Independence is knowing where your money goes. Why is this so important?

Knowing Where Your Money Goes
* See WHERE you are spending too much
* See WHAT you are spending your money on
* See Why you have no money, even if you think you aren't spending a lot


Where does it go???

What Can You Do With This Information
* Make a budget you are comfortable with that meets all your needs..and wants
* Plan for the future
* Adjust your spending


Stop WASTING YOUR Money!

Ok, now that you know WHERE your money is going you can really get started. Knowing where your money goes let's you adjust your spending and set goals.

We think getting out of debt is sooooo much work, it is but if you have a plan that grows as you grow the work is a lot less. Finding a spending pattern that fits your goals and needs makes getting out of debt so much easier. Think about it..if the hardest part of getting out of debt is not having enough money, think how much easier it is once you know and can budget.

I promise you will find money you didn't even know you had....

Personal Finance 4 The People can help!

We specialize in finding where your money goes, budgeting, prioritizing, setting goals, teaching basic financial principles, saving, planning, and helping you to reach your own Financial Independence!

‎2012 is right around the corner, why not decide to get your finances in order for the new year? Start the year off right with a FREE FINANCIAL ANALYSIS????

Know who and how much you owe!
Know where your money goes!

... If you choose, I can show you how to get where you want to be!
Email or call for information...

personalfinance4thepeople@gmail.com
202-431-8008