Melcar Group

Budget Guru

Getting control of your Finances

Too many people live with an unknown certainty of what their financial future will hold, while continuing to purchase items using credit or loans (essentially money they don’t even have). Sometimes it may feel like there is no hope at the end, or that the financial trouble will never be cleared, but having control is the first step to realizing your situation and making a positive change.

Personally, I feel that the very first step to making change (beyond recognizing there is a problem) is determining what your current situation is. Make a list of your current assets (whether it is cash, property, or any other value yielding item) along with your liabilities (debt, loans, car payments, etc). I find that writing this stuff down either on paper or electronically allows you to visually see where you are financially. Also, this will allow you to create a starting point, and to look back within 3-4 months to see where progress has been made. Once that is completed, it is important to create goals, both long term and short term. Short term goals allow you to continuously reach a goal, which provides self satisfaction regularly. Long term goals, motivate you to work towards something and to stay on track to reach that goal. Once you are aware of your situation, and have a goal in mind, you have to create a budget that you can maintain. The budget, in my opinion, is one of the most essential steps and processes that allow you to reach your goals. Be sure to include debt repayments, savings, and emergency funds payments into your budget also keep in mind money for food, transportation, entertainment, and other expenses as well. If your budget is too strict (for example, it does not allow for entertainment expenses) you will slowly begin to fall off track. The main purpose of the budget is to live within your means, and avoiding purchasing items with your credit card.

Once you have created your budget, implement it and keep track of all your purchases. At the end of the budget period (whether your budget is monthly, weekly, biweekly) review it and see if there are any areas which can be improved going forward. Once that is done, your financial path is set up for success.

In my personal experiences, once I created a budget for myself to follow, I realized that I had extra money that I could save and looking back I probably just spent that money on “stuff” previously. It is a great feeling knowing that I created something for myself which I am able to follow and save money at the same time. Another amazing thing about my budget, is the fact that I no longer have to depend on my credit card for any purchases, since I can now purchase everything in cash.

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April 13, 2009 Posted by | Budgeting, Savings | Leave a comment