Tuesday, January 11, 2011

The Beginnings

Before we can start to save for that dream property,
vacation, car, etc. we need to get our financial "house" in order. To begin.... make a list of what comes in for income and what goes out for expenses (dates for both). Much like writing down what we would eat to make changes in our waistline, this we will call a financial diet and trim the fat from our expenses to fill that wallet of yours. Here is an example list;  A) Rent/Mortgage  B) Groceries  C) Credit Cards  D) Car/Transportation   E) Clothing   F) Personal Taxes  G) Health Care  H) Life Insurance  I) Furniture  J) Eating Out   K) Entertainment ( movies/bars etc)   L) Recreation. So like any business you need to have enough income coming in to pay the bills and so your not  running into the red.....are you that delusional, then you should run for political office (lol) as that is why most governments have a deficit!  Also living on credit does not work either as the interest will kill you and you are working for free, not much incentive to get up Monday morning is it?  Us humans are a funny breed, what we consider a must as part of our wants and needs in most cases has to change. There is an "A" list of bills;
having a place to live, to eat, clothing and transportation. Its the eating out, needing that $5 latte, meeting the boys for a weekend downtown (every weekend lol), extra pair of shoes to go with the 100 you have all ready, spa treatments, a gym membership that comes out each month that you never use.....you get what i am talking about. As North Americans we have grown use to being in debt, well if you want more out of life you need to change that mindset. So with just a few small changes in lifestyle you can achieve whatever your dream is by paying yourself first, say 10% of your monthly salary ( set it up with either work or your bank for automatic withdraw and you will not miss it) and put that on the "A" list and then start reducing some of those off your wants column . So if your goal is a home for example, a downpayment/closing costs is $10,000 or that holiday in the South Pacific at the same price, then by paying yourself $300 per month for 33 months......then get ready to turn the house key baby or book that flight to Australia. Just give up an extra few nights at the bar or brown bag it to work three times a week, make your fav coffee at home for pennies a cup, whatever as the above list will tell you what to cut back on. I am not saying to give up on everything as its a matter of perspective on what you really want in life, so look in the mirror and you decide.

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