Where is all my money hiding?

Flying MoneyIt’s Thursday, my busiest day of the week.  In between showing houses, meeting with appraisers, office work, dentist and doctor appointments, school shuttling, sport practices, Boy Scout meetings and food shopping I have to find time to work out our spending plan for the next week.

We are a down-to-the-penny planning family.  There is no margin for error.  If I don’t tell our money what to do every week bad things could happen.  How do I know this?  Because we’ve lived it.  I can remember not too long ago when we had no plan at all.  Bills were paid at random and pocket money was spent haphazardly.  We didn’t have a penny in savings and the credit was maxed.  Yes, we survived it, but I don’t ever want to go back there.

I’ve read countless books on how to handle personal finances, how to invest, how to pay down debt, how to build an emergency fund and so many more.  To cut through all the fluff for you I’m just going to be blunt.

Psychologically speaking, people HATE the word Budget.  It subconsciously brings to mind a straight jacket or something.  They feel as if using a Budget is restrictive, that they are denying themselves pleasure if they tell their money to go somewhere other than their wallet.  The truth of the matter is you need one.  If you don’t get one you’ll be living paycheck to paycheck for the rest of your life.

I don’t care what you call it, they’ve got all kinds of fancy names for them to help you get over your fears, but for the purposes of this blog I will be referring to it as either a Budget or a Spending Plan.  Personally, I like the Spending Plan better.  It tells my subconscious that I am in control, not the other way around.  I love a good plan.  And my Spending Plan is my creation therefore, I control it.

Over the course of a few blogs I’m going to break down the process for you, step by step.  This week we’ll focus on getting to know your debt, for real.

Whether you are an online bill payer, an envelope stuffer, a money order maker a debit card payer or a cash transactioner…you all have bills.  Your mission this week…find them all.  Go back through your bank statements, receipts, or whatever you use to track your expenses and dig up an entire year’s worth of your bills.

Why?

Because you need to get a clear picture of what you’re paying out, on average, over the course of a year.  Later we’ll break this down into monthly and weekly formats but for now, go figure out what you spend on heat, gas, electricity, gaming, internet, satellite radio, coffee’s, latte’s, drive thru’s, whatever you are putting out, find it.  The only way to have control over your Spending Plan is to know where your money is going.

“But Dez,  what if I don’t have a whole year’s worth of stuff?”

That’s fine, use as much as you have.  Then multiply it by whatever to come up to a 12 month expense period.

This is important folks so give it the attention it deserves.

We’ll talk more next week!

–Dez

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