Tips To Get You Through The Financial Storm Unharmed

Are you feeling spooked by the latest financial news?

You are not alone my friend. The majority of the population are struggling to find a way to survive. When we hear that huge financial institutions are collapsing overnight it is really hard to know what to expect tomorrow.

You can still take control over your financial situation. However you will need to be very disciplined and determined.

Take some time to write down your financials on paper.

For those who are not used to dealing with numbers it is a great help to see all the income and expenses written on paper. This will also help to motivate you to take the necessary action. To see the whole picture will help you to identify mistakes and “the little excesses” – the apparently inoffensive expenditures that can be the biggest villains when you add them all up.

Make a list of all your income and expenditure over a month.

Be very meticulous, at least for once!  EVERY time you make a payment write it down in a little notebook straight away showing what it was for and the amount spent. Do not miss anything because things like mid-afternoon coffee or the little thing you buy when getting the newspaper are frequently overlooked. Record everything you spend AS YOU SPEND IT. Otherwise you will miss items. The reason budgets blow is mainly because of these small expenditures which people think are too small to worry about and then tend to ignore. Look out for these small payments through the month and you will see just how much difference they really make.

Identify where you can reduce your expenditure and put a limit on the non-essential items.

The secret to making a good financial plan is to put a serious limit on unnecessary payments and to be very disciplined to follow this limit. If you look at your notebook you will be surprised at how much the apparently inoffensive items can affect the health of your finances. There will be some payments which are not under your control such as rent or mortgage, taxes, fuel, and electricity and gas bills, but food, personal and hygiene products you can control by comparing prices and choosing different brands. For clothing and leisure you can establish a limit on your spend and stick to it no matter how fantastic are that pair of jeans or shoes, or how fantastic it might be to go out every day.

Establish precisely how much you can spend each week or month.

Make your plan of how much you can spend each week or month by making a list as follows:-

• Write down one under the other all the payments you must make which are out of your control like rent, electricity, gas, etc. and add up these items.

• Using your record of payments in your notebook make a plan of how you will spend any income left after paying for the non-controllable items above. Choose the essential items first such as food. This must include EVERYTHING that you can possibly spend money on including all of the small daily expenses.

Ideally your total planned spend should be LESS than your income after tax so that you have something in reserve for any calamity that might occur. However in the current financial climate just make sure that it does not exceed your net income because that is a perfect recipe for rough times ahead.

Now add loads of willpower and determination to stick to this recipe and you will be able to see the first rays of light when coming out from the other side of the tunnel. Hold tight!