Step 1 - Prepare a Budget
Do you know how much you spend each month on take-away meals and
snacks-on-the-go? What about your spending on assorted newspapers and
magazines? Or how about something as boring as utilities like water,
gas and electric ... what do they run up each month?
The first step to taking control of your finances and getting debt
free, is to prepare a budget. Find out what you are spending and where.
Take a pen and paper and write it all down. And not just the big
stuff, like the council tax, the various insurances, rent or mortgage
but the little things too. All those incidentals, like the video
rentals, the meals out and the shopping trips that always end up with
at least one unplanned purchase.
It has all got to be budgeted for. Every single thing that gets a
share of your money.
Don’t worry if you can’t think of everything, you can
always add any expense you remember later. But get that list started.
Trust me you’ll be surprised where the money goes. How all those
‘little things’ seem to mount up.
Don’t forget to also list your income. Not just how much you
earn, but include things like child benefit, maintenance, CSA
payments and pensions.
There are a number of free tools to help you do this. There are two
online calculators available from the Financial
Services Authority or CalculatorWeb.
Once you have both expenditure and income totalled up, you can see
just what money you have and where it is going. Then you can get on
with the next step . . .
