- Get Help With
- Agency Professionals
- About 2-1-1
- Media Center
- Contact Us
- Chat Now
In order to make educated decisions about how you are going to make ends meet you must start by identifying how much you earn and analyzing how you spend your money. Most people can easily identify the income part of the equation by simply looking at their pay stub. If you have several jobs or earn some of your money in gratuities or from other sources you'll need to make sure you include everything if you want to get an accurate picture of your income.
The same is true when analyzing how you spend your money. Don't leave anything out. In addition to your household, clothing and grocery bills make sure you include irregular bills that you only pay a few times a year (like car insurance) and any cash you are spending daily for transportation, business lunches, morning coffee, cigarettes, etc.
Monitoring income and expenses for a month or so will help you see where your money is going. Now, you must try to create a budget that you can live with. Use this budget worksheet. You are not alone if your expenses outweigh your income. Perhaps there are some things you can do to remedy the situation a bit.
Distinguish between your essential expenses and the expenses you incur for things you want; then cut what you can from the non-essentials. Essential expenses include things you must pay for such as:
Expenses that fall in the category of "wants" include anything that you would like to have but don't truly need such as:
Pay off your debt as soon as you can. Look at the interest rates you are being charged for your credit cards, home equity loans, car loans, college loans, mortgage and any other debt you have and pay off the loan with the highest interest rate first unless the interest paid can be deducted from annual income taxes as is the case for your mortgage loan. Make sure you continue to make your minimum payments on the others while you do this. Once a debt is paid do not use the source again if you can avoid it - otherwise in short order you will be right back where you started.
Explore ways to cut costs on essential expenses. Use coupons when buying groceries. Buy clothing from discount stores or when it goes on sale. Learn about energy saving tips. You may be eligible for:
Find more money saving tips at websites devoted to financial literacy.