A Guide For Personal Finance

I was divorced and raising five children, working for minimum wage, and paying a mortgage, utilities and car payment. I received no child support, of other source of income or aid, yet I was able to feed the family by managing my weekly paycheck to the bone. Let me tell you, we did without extras and it was difficult, but I managed. You can do it too, if you are determined and strong willed.

The first thing you must recognize is how much money do you need each month to pay your bills? To find out how much you need make a list of all your expenses for the month which should be house payment, car payment, credit cards, utilities, internet, telephone and cable bills. You can use pen and paper, or if you have Microsoft Money on your computer it will almost do it for you.

The most important step you must take is to recognize all those small expenditures you make daily without realizing it. It is important that you keep all receipts for purchases. It doesn't matter if the purchase was made with cash out of pocket, with a credit card, or with a debit card, you must keep the receipts. And don't just throw them into the car, or leave them in shopping bags; maintain a habit of stashing them in an easy to access spot such as your purse or console of the car. Make it a habit that when you get home, you will take all the receipts and either write them into the list you are creating, or put them on the computer in the Microsoft program.

Do this for one month. At the end of that time you can tally up the list of expenses and know what you have spent, or in the case of Microsoft Money, you will have categorized each amount and the computer will tally it for you.

Take a look at your list. Are you surprised how much over spent over and above what you thought you were spending? Most of us are. But here is the kicker, you now know where you can cut back and take control. Did you spend money on tips, haircuts, salon treatments, lunches, donations, magazines you didn't read, toll roads, pet toys, grooming, gifts, clothes you won't wear? Did you spend money for entertaining guests? If you are conscientious, you can cut back on all those listed and some that I have not listed and save money. You may even be able to eradicate most of it. For example I learned to cut hair and began to cut not only my children's hair, but later that of my spouse. At the price of haircuts today that will be a big savings. Maybe you are afraid to cut someone's hair, so just give it a trim to keep it neat.

Beauty salons are not essential. I know it sounds good to tell your friends and co-workers about your latest manicure or waxing, but you can purchase nail polish, cuticle remover, emery boards much cheaper than you can pay a manicurist. And the new rage is all natural. I notice more and more women today with short, neatly trimmed and polished nails instead of long, artificial ones.

There are alternates for everything you do. Surely there is another route you can take to work that will avoid paying a toll. It may not be as fast, but it will save more than you will spend on gas to travel that way. Search out an alternate route. If you spend $2 toll to get to work, and take the same route home again, that is $4 a day in tolls. Multiply this by five times a week and then multiply that sum by 4 weeks and you are spending $80 a month to get to and from work.

They no longer call it "keeping up with the Jones", but if you feel you need the latest model car, largest TV set, newest computer, or latest style of clothing you are "keeping up with the Jones". Perhaps last year's style of clothing is not what you want to wear this year, but you can dress it up by changing the accessories you wear with it. And don't overlook thrift stores. They do carry accessories such as handbags, jewelry, and scarves at a savings over purchasing these items new.

Now its time to make a list of all your income. Include wages, gifts, child support, notes or trusts you receive regularly. Total this amount. This is your monthly income. Place this amount at the top of the paper where you listed all your expenses. Subtract your expanses from your income. Here is where realization takes place. Are you living within your means, which means is your income larger than your expenses? Or are you going into the hole which means your expenses are larger than your income?

Take control now. When I was raising five children on minimum wage, I quickly learned to place three-quarters of my weekly paycheck into a checking account each week. I did not write checks all month, but on the first of the following month I was able to sit down and write checks to cover my mortgage and all regular monthly expenses. There actually was not enough to live on with the one-forth I had kept in cash, so I car pooled. In my situation, I drove co-workers to and from work since they were on my route anyway, and each of them paid me for the gas it would have cost them had they driven their own vehicles. They felt it saved wear and tear on their cars, and I was coming out ahead so that I had more than enough for gas in my own car.

I also figured how much I could afford to spend on food each month, and I did not veer from that amount. It meant the children might have hot dogs and pork-n-beans for supper, but they loved it. No trips to McDonald's, we had home cooked hamburgers or homemade soup. There are so many ways you can cut down of expenses that you will be amazed. But you have to work at it, you have to think about it, you have to resist impulse spending.