Week 2 in Financially Overwhelmed? series
This is a “you need to crawl before you walk” step towards reclaiming your finances. I’ve noticed that a few books I’ve been reading seem to leap right into collecting three to six months’ worth of financial expenses before proceeding with anything else. Gail Vaz-Oxlade’s Debt-Free Forever mentions collecting six months of expenses on page 2 of Chapter One to track spending trends. I believe this is absolutely a necessary step towards getting the bigger picture for your money habits but for someone just trying to wrap their head around what’s happening in their financial life, this could be quite overwhelming. I know it was for me.
So here we go:
Below is a sample budget that I had for myself a few years ago. Take note of the headings included in the budget, this is a basic budget designed to help you figure out how much it’s costing you to live every month. Necessary expenses like mortgage/rent payments; car payment; insurance (auto, property etc.); monthly bus pass; and/or minimum credit card/loan/line of credit payments.
Important points to remember:
– Be honest – don’t hide from your financial situation by rounding down or guessing at different payments or totals. This isn’t what you want to be, this is what it is.
– Be thorough – do take the time to pick up the phone and call your lender or go through the paperwork to get the information you need to feed into your budget.
– Be timely – pick a time when you have a few hours, an open area to work with, and a glass of wine, or a cup of coffee. Pick a time, also, when you are feeling clear-minded and open to the information.
– Be courageous – it takes courage to face something that you know is going to be difficult. Kudos!
Once you’ve gone through all your information, you will have a much better appreciation of what you’re current incoming/outgoing financials look like. Next week (Thursday), we’ll talk about what to do with your new found information.
Now readers, have you ever had to “be honest” with yourself about something you really didn’t want too?
Here is a sample budget sheet that you may want to check out (this is a downloadable excel spreadsheet from moneymentors.ca.
*Money Mentors is a nonprofit credit counselling agency. You don’t need to need credit counselling to take advantage of their Learning Centre however.
Canadian Budget Binder says
We love our budget obviously and for good reason, it keeps us on our toes so we know what our financial picture looks like. A budget takes work but in time it becomes a lifestyle and is so easy you forget you are doing it. I have a few free downloadable tools that your fans might like. A pantry list, grocery list, basic budget, overtime tracking. All these were designed with the budget in mind and to keep organized. Gail is a great influence on many. Thanks for sharing this!
Thanks CBB! You are definitely right about it taking practice, I would be embarrassed to tell you how many revisions of this concept I had to go through before getting comfortable with being accountable on paper.
I felt that if I kept my financial situation “open” without having to tie myself down to a restrictive budget, that it would actually be better. I felt I could be more flexible with how I responded to “things that came up”. All that ended up happening was that I was constantly in financial crisis mode, throwing money at whatever debt inferno happened to be blazing the brightest at the moment. Not cool.
Viva La Budgeting!