When it comes to your finances, have you ever sat and thought, “Where have I gone wrong?”
It’s never too late to evaluate your financial situation and get yourself back on track. But going through your finances is like making that New Year’s Resolution – you mean well, you’ll plan on doing it, but you just never get started.
No matter the time of year, if you are feeling the crunch, you need to take a look at your finances and get yourself back on track. Luckily, there are two simple steps you can take to get the ball rolling.
Step One: Look at your budget (and yes you do need to budget!). Ask yourself:
- Does my spending match what my budget outlines?
- Is my budget realistic?
- Am I covering my expenses?
- What are my goals?
These questions may seem simple, but they are key indicators for how you will pay for things, how much debt you will carry, and how money can affect your quality of life. The first three questions are really just basic math: is the money you have coming in greater or at least equal to that of what you have going out?
Does that money match the plan that you set out? Ideally, it does, but sometimes we get off track and overspend on holidays, clothing, unplanned expenses, etc.
Step Two: Set your goals. The most helpful guide to determining where you are in your budget is to see if you are getting closer to your goals. For instance, if your goal is to be debt-free, don’t put your holiday shopping on your credit card. If your goal is to save money, living paycheque to paycheque will stop this goal in its tracks. If you want to stop spending money on clothes, avoid the malls at all costs.
You can easily apply this two-step process to your own finances. Firstly, create a budget if you don’t already have one. Download our free financial goals and worksheet planner as a great visual tool, which can help you see where your money is going and will help you make your financial decisions.
Next, determine what your immediate financial goal is (i.e. save, pay down debt, buy a house). Where does this goal fit within the budget you have just made yourself? By taking these two steps you will find your finances a little bit easier to manage and you will reach your goals.
If you find yourself in a situation where you have tried everything and are just not able to balance your budget or you are still worried about the money you owe, give us a call. We offer free consultations and can help you get back on track!