The Three Universal Steps to Get Your Finances Under Control

Do you have credit card debt? Are you overdrafting at the bank? Are you desperately struggling to pay your rent? There usually isn’t an overnight fix for that, but it is a fixable problem. Beyond get a job and avoid getting into debt in the first place,these are the three basic steps to getting your finances in order.

1) Budget: Write down what you’re spending money on. If you can access your bank account online, do that and go back 2-3 months to make sure you aren’t missing things. Pro-rate for things you spend money on once or twice a year like shoes (If you spend $120, budget $10 per month on it.) If you are buying things like books on Amazon, lunch with friends, coffee at Starbucks, etc, account for them. Include debt payments. You want accuracy.

2) Figure out where you can cut expenses: Now that you know what you’re spending money on, you have one of two ways to reduce it. The first is to cut expenses. Start by looking at your house and car because those are usually the big ones. Then start categorizing your unnecessary expenses. Do you need cable TV? An expensive cell phone? How much are you eating out? What are you spending on booze? Look at every way to save money possible and figure out how much you can cut down per month.

3) Figure out the ways you can add income: Can you get promoted? Can you get overtime? Should you leave your job for something that pays more? Can you get a second job?

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Once you have done these three things, you can make intelligent choices to get your finances in order. While you are doing that, remember that your goal IS NOT to break even, it’s to pay your bills and have money LEFT OVER. You will need that money for savings and to build up a nest egg for surprise bills.