Take control of your money

Do you spend money without first calculating what you can afford? Is there always more month than money? Is there nothing left when you have paid a few bills? Does the fear of finances mean that you avoid checking your bank balance or finding out what you owe? Out of control finances can place you into a very frightening situation. Credit cards become maxed out and your overall level of debt becomes unmanageable. Taking control of your money can make the difference.

Without financial planning, achieving a balance between income and expenditure and providing for the future is impossible. The good news is that fear of finances can be conquered using a few simple techniques. Taking control of your money can eliminate the fear of finances.

The first step in taking control of your money revolves around knowing what you spend, your fixed expenses and your debt. It is a question of awareness. List of all of your monthly expenses. A spread sheet is a useful tool to achieve this. Begin with your fixed expenses. These are expenses that must be faced regularly but remain the same. Fixed expenses include rent or mortgage repayments, insurance, subscriptions and so on. Next list all your variable expenses such as telephone bills and electricity. List all your debts and the monthly repayment.

On the spread sheet include your income in one column and the expenditure in another. Total the expenses.

For the next month, carry a notebook to record each item that you spend on. This may seem tedious at first but as time goes on you will be amazed to find out where a lot of your money is going. Select categories for this spending and add it to the spreadsheet.

Compare the totals of the income and expenditure columns. If there is a shortfall between the income and expenditure, then there is a problem that must be solved. It is impossible to sustain an income and expenditure shortfall in the long term. Urgent action is required to achieve a balance.

A schedule of your expenses and income is a great start. It provides an awareness of your exact financial status and places you in a position to begin taking control of your money. Knowledge is power! Armed with knowledge of your actual status, you will be able to make the crucial decisions regarding your financial status.

Ask these questions:

What can I afford to pay?

What can I afford to spend on food, entertainment, clothing?

If there is not enough to cover the full payments for all of your accounts then work out what you can pay. Call your creditors and let them know. Most are willing to receive a reduced payment rather than nothing.

When you review your spending you will probably find expenditure on items that don't add much value to your life. Eliminate excess spending. Your goal should be to allocate the first ten percent of your income to savings or investments. This is the first step towards achieving financial independence.

Setting up a budget is one of the main techniques used to control your money. If debt is proving to be a major problem, then eliminating debt from your life could mean the difference between financial disaster and financial success. Eliminating debt could be the most effective way to fix your finances.

Everyone is limited by the amount of income available from month to month. Taking control of your money can provide the answer to eliminating a fear of finances. The important thing to remember is that it is not the amount of income but the way that it is managed that matters.