Take the panic out of January bills!
Take control of your money.
Feeling overwhelmed by a pile of bills now that January has arrived? Cold weather has driven up the cost of heating homes, electric bills are higher due to early darkness, holiday lighting and extra baking. Warming the car up due to extreme cold temperatures outside means extra gasoline purchased. The list goes on and on. It is easy to just throw your hands up and give up, but ignoring the bills will not make them go away. It is much better to put yourself in control by creating a monthly spending plan.
Start by keeping track of everything you spend. Carry around a small notebook and write down anything you spend money on. Include everything, especially small amounts because they add up fast. For example, $2.00 per day times 7 = $14.00 per week (doesn’t seem like much!). But $14.00 per week times 4 weeks = $56.00 per month (Okay). Now take $56.00 times 12 months = $672.00. Almost $700.00 in a year’s time could pay off one of your bills! You may be able to find a free app for your cell phone that can be used in the same manner as the notebook.
Make a list of your monthly bills. Include rent/mortgage payment, utility bills including cell phones and internet costs, home and auto insurance costs, auto loans payments, student loan payments and any other monthly credit payments. Remember to include expenses that only come up occasionally such as car license plates.
Total all of your expenses including food, gas for the car, pet foods, lunches, clothing, etc. Look at your notebook to find where you spend your money on a daily basis. Add the monthly bills from above. Now you have a picture of where all your money is going. Remember to include savings in your monthly plan.
Add up your monthly income from all sources. Subtract all of your expenses from the total of your income. If your expenses are exceeding your income, you will need to make some adjustments.
Is there any way to increase your income? Pick up a part time job? Sell something? How about decreasing spending? Can you purchase soda by the case and take it with you from home instead of using a vending machine? Turn the heat down during the day if no one is at home? Turn lights off when leaving the room? Discuss the situation as a family. If everyone is included in the discussion, everyone has the opportunity to contribute to the solution.
Michigan State University Extension has a “Managing Your Money” worksheet that can be used to track expenses, record monthly bills and income and help keep your finances organized. If you’re wondering about your financial health, take a financial health survey from MI Money Health to get your financial health score. It’s confidential and your answers never connect back to your name. This survey can help you evaluate your current financial situation, provide ideas on how you may improve your financial health, and connect you to resources in your local community.
Keeping track of your spending can bring a sense of control over your finances. It takes time and practice to get a handle on your spending; be patient and persistent. Planning your spending on a monthly basis will provide you with a history of your spending patterns and it will provide positive results for you and your family.