A lot of people in Milwaukee, Racine and in cities across the country have made New Year’s resolutions, and by now, most of those good intentions have probably been all but discarded. It’s not too late, however, to try again, especially when it comes to dealing with your money.
Whether you have outlined a new budget, identified a problem spending pattern and/or have done nothing at all, it’s never too late to start improving your bottom line.
As you have probably heard since you were young—a good way to start planning your budget is by laying it all out like a profit and loss statement. List what you absolutely have to pay out (mortgage/rent, bills, gas, etc.), what income you have coming in (from your job and other sources) and what you purchase that may or may not be trimmed down (clothes, food, fun, etc.).
Once you have the three categories, you must first, evaluate, and then second, change where applicable. People want to instantly go to the third column, cut their clothes budget down and call it a success. Every category needs evaluated. Even for bills and payments that you believe are fixed. Let’s look at those for a second.
Take your mortgage, for example. Because of the loan and the locked rate, a lot of home owners just continue to pay the same amount every month for the length of the loan. But that doesn’t have to be the case. You may be able to refinance and you should also look into bi-monthly payment options that could cut away at your principal over time.
The thing to remember is that you actually have to evaluate everything if you are realistically going to make changes to your financial outlook. Once you have looked over the first part, move on to your income. The easiest way to make a budget work for you is by making more money. Yes, that’s easier said than done, but maybe today is the today you apply for another position with a better pay grade.
The last step is cutting out the things you don’t need. How much difference is there really between a $4 chocolate bar and a $1 one? Nickels and dimes quickly add up to dollars.