Most of us experience times when the money dries up just when you don’t want it to and this leaves you in a bit of hole to try and dig yourself out of it, until you next get paid.
Lenders like King of Kash are there to try and offer you a loan when you need one, especially if your credit history is not that great, but it also makes sense to try and put a plan together to start fixing your finances, so you are better prepared for the next financial emergency.
A month to turn your finances around
Most of us work on a month-to-month basis, so that is actually an ideal timeframe to put a plan of action into place in order to sort out your finances and put your financial future on a better path, in just 30 days.
The main thing to remember is that when you put a plan of action in place, you go through with it.
All it really takes, is no more than 30 minutes each day over the next 30 days, tackling a list of financial matters to deal with and resolve. By the time you get to the end of the month and are ready to turn the next calendar page, you might just find that you have managed to put yourself in a better position to move forward than you were when you started .
Get everything together
In order to properly sort out your financial situation, you need to diligently compile every single bit of detail and put it all together into a easy-to-read format, like an excel spreadsheet for example.
It doesn’t matter what format or software program that you use, the main thing is that you leave no stone unturned and put all of your current finances under the microscope.
Sort out some categories to put everything into. Typical headings would be regular expenses, such as rent, utilities, all of the things that you pay out of your salary each and every month. You also want to list all of your current loans and credit cards, with details of how much you currently owe and what monthly payments you make.
It is really important that you create a comprehensive list and don’t leave any item of spending out, as you won’t be able to put an accurate picture of your finances together unless you tell the whole story and put everything together in one place, so you can see exactly how much you owe and how much you are paying out each month.
Expenses and income
One of the reasons why a spreadsheet is useful to compile all of your expenses and income, is that you can then manipulate the data to see how changes to your payments or income, will impact on your monthly finances.
As well as regular expenditure, do also make sure that you make a note of any irregular expenses, like annual insurance payments, tax liabilities and anything else that needs to be accounted for.
Seeing a plan come together
Over the course of the month, as you are putting all the information together and seeing what you are spending each day and week, you will almost certainly spot some opportunities to make some changes and see a potential plan come together.
One of the most critical aspects that you are looking at is to see whether your spending is in line and realistic in relation to your current levels of income.
As your financial picture comes together throughout the month, you can take the chance to pick an area of expenditure and see where potential savings might be made. It is often a surprise to many of us, just how much small items of spending add up to a big number at the end of the month.
For example, grabbing a coffee to go on the way to work each day, can add up to a decent number, so if you need to make some savings out of necessity or so that you can put more away for bigger things ahead, use your spreadsheet to see just where those savings can be made.
Loans and credit cards
There are potential savings to be made by reviewing your current levels of credit card debt and loans.
You may well be paying a large percentage of your income each month, clearing off loans and credit card debt, and some of these products, like your credit card, could be costing you more than you might be paying elsewhere.
Take a look at all of the information you have put together over a typical 30 days of spending and then use that data to see how you can declutter from a financial perspective and put yourself in a better position going forward.
Molly Peters is a personal finance consultant who shares her wisdom around the web in her useful articles. Outside of work Molly enjoys photography and has just taken up badminton.