Know What You Owe!
The first step in fixing your finances is to know exactly what you owe and who you owe it to. Make a list of all your monthly bills that are generally fixed such as rent or mortgage, phone bills, internet and cable, electricty, car notes, insurance, etc. Once you have the list, add up all those expenses and subtract them from your monthly take home pay. This is what you have left to cover expenses like your grocery bill, entertainment and eating out, credit card payments, and savings.
If this number is looking extremely small, you may want to consider ways that you can cut your fixed monthly expenses. For example, do you really need a home phone service and a cellphone? Most people can now get by with just a cellphone. More on that later. For now, we are just going to work with the numbers available.
Say after paying all your fixed monthly expenses you have $1,000 left for the month. How much do you owe on your credit cards? What is your monthly minimum payment? How much do your groceries normally run per month? How often do you eat out and what do you spend on an average meal when eating out.
Before you can fix your finances, you have to know what you owe and how you spend your money.
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