Top Personal Finance Blogs
Wednesday November 20th 2019

Do it Now: Five Steps You can Take Now to Fix Your Broken Finances

When you find yourself in a financial hole, it can be overwhelming to dig your way out again. These five tips can get you past the initial sense of hopelessness and in motion toward erasing your debt and living within your means once again.

1. Create a Daily Spending Journal

Dieters who are serious about dieting write down everything they eat in a day. If you are serious about correcting your finances, you need to write down everything that you spend in a day. You may be surprised how much you are spending for small, incidental items. If you spend a couple of dollars every day on a snack from the vending machine, that adds up to ten dollars in a regular work week. Write down everything you buy for at least a week so that you will be able to see where your money is really going.

2. Write Down a Budget

It sounds simple, but writing down your budget is the best way to track your spending. Begin by listing all of your regular bills and the dates they are due. Then give yourself spending money for other thngs that you buy regularly, like groceries and gasoline. Make sure you give yourself some extra cash to spend on fun things as well as the necessities. Your budget should also include a certain amount toward savings every month, even if it is a small amount.

3. Check Your Credit Report

Everyone is allowed to check their credit reports once a year through three different services. Take advantage of the opportunity to see where your credit rating is and why. Look through the listings to make sure that all of the information is accurate. Understanding your current credit rating will help you make changes that will improve your numbers.

4. Stash Some Cash for Different Purposes

Keep some envelopes or jars in your house where you can keep cash that you might need during the week. One stash could cover unexpected expenses from your kids. Another stash could be kept for play money that you can use to eat out or go to a movie. Having these separate stashes ensures that you will have the money you need for certain purposes without needing to stray from your budget. Sometimes just knowing that you have a little money set aside for a fun activity will make you feel less urgent about going out, so you might actually save that money for another day.

5. Clear the Clutter From Your Home Office

Go through your home office or computer and clean it out. Keeping your files organized will help you keep your finances organized. If your paperwork is a huge stack on the edge of your desk, bills and other important documents can get buried or lost. Create a place where you can keep bills that need to be paid, and put your bills in that place as soon as you bring them in from the mailbox. If you make it a habit, it will be easy to stay organized.

Figuring Out Your Financial Goals

Most people have a general idea of what their financial goals are, but they never dig down to the specifics. If you want financial independence, for example, what does that mean? It is important to create a detailed explanation of your financial goals so that you can begin to work seriously toward them. You will have better success meeting your financial goals when you have a better understanding of exactly what they are. The sooner you start, the more you will be able to take advantage of accumulating interest that could speed you toward your goals even faster.

Make a List

Begin with a broad list of your financial goals. Think of big things, like buying a new home or paying for college tuition for your children. Once you have defined the big goals, do some research into possible ways to achieve those goals. If you want to send your kids to college, find out about the tuition and housing rates at some of the schools in your area. Give each of your goals a real number to achieve so that you can create a realistic time frame for reaching that number.


Once you have a good list of goals, you need to decide which ones are the most important. You may not be able to afford to save for college tuition and pay for braces at the same time. Think about each of your goals realistically and arrange them in a manner that makes sense. When they are arranged by importance, you can focus your money and energy on the goals at the top of the list first. Once those goals have been met, you can begin to work on goals that are further down the list. The importance of some goals may change as time passes, so you should update your priorities once every other year or so.

Scrutinize Spending Habits

The toughest part of working toward a financial goal can involve adjusting your daily spending habits. When you start to buy a new electronic gadget, think about how much money you are spending. How far would that amount of money put you toward your goal if you put it in savings instead? How long would it take you to make up that amount of money if you did not apply it to your goal. Find ways to remind yourself of how important the goals are. You should also allow yourself some fun money in your budget so that you don’t feel like you are always sacrificing.

Make a Solid Plan

The best way to keep on track toward your financial goals is to create a realistic plan that you know you can follow for the long term. Some of your goals may take years to accomplish, so your plan needs to fit your lifestyle comfortably for a long time. Create a budget that allows you to put a specific amount of money toward your goals so that you can reach them in a timely manner, but don’t make the budget so strict that it is impossible to live up to.

So You Set A Budget…Now What?

Setting a budget is an important financial responsibility every individual should do. A list of total household income and expenses should be calculated and written down in order to get the most accurate picture of a person’s financial lifestyle.

Review and Reevaluate Budget Regularly

Once the initial task of compiling a budget is accomplished, it’s essential to review it several times for accuracy. Check all of the individual items in both the expenditure and income sources categories. See if they’re truthful and be honest. Then recalculate the grand totals several times as well to be certain no unintentional errors were made when using the calculator. Once this is done, and the budget feels totally accurate and honest, then it’s time to put the budget away for a short time. But it then has to be revisited on a regular basis. Every month is a great idea because changes in expenses and income can happen in any given monthly period.

Stick to the Budget

It’s essential to maintain adherence to the household budget. Don’t be tempted to overspend in any expenditure category that was itemized on the budget. If $200 was the average estimated utility bill for each month, then make sure to keep electrical costs down so that it’s only $200 again the next month and not more. Don’t deviate with any other category as well. Don’t feel that more has to be paid on the credit cards or that it’s necessary to double up on the car payment just to try to get ahead of the game financially. Stick to the maximum allowable monthly expenses and also try to maintain the same income levels as originally calculated in the budget.

When a person ignores his once carefully thought out budget. it’s inevitable that problems will arise. There won’t be enough money at the end of the month to pay all bills on time and maintain a strong credit history. Or expenses will get out of hand for unnecessary materialistic temptations that will prevent the person to be able to save or invest the amount budgeted for at each monthly interval. Discipline is the key.

Set Short and Long Term Monetary Goals

One of the best effects of setting up an intelligent and accurate budget is that individuals can gain psychological satisfaction by planning short and long term monetary goals. If $250 a month is dedicated to be saved out of one’s gross monthly income, then a short term goal can be to save a few thousand dollars as a down payment on a car that would help the household out. A longer term goal with this same amount of monthly savings can be to accumulate enough money to help pay for college expenses down the road.

These goals can come right out of an accurate and steadfast budget, and it makes a person feel completely in financial control of his lifestyle instead of living in constant fear about where his next dollar will come from and how he’ll end up never paying for substantial purchases and investments in the future.

It’s not at all difficult to accomplish these tasks when setting an intelligent budget. All it takes is a little bit of determination, planning, discipline, and awareness of an individual’s overall financial picture at a given point in time.