Welcome to the 12 Days of Christmas - Personal Finance Style! Over the next two weeks, personal finance bloggers around the internet will be bringing you the 12 Days of Christmas with a financial twist! We hope you enjoy the series!
On the first day of Christmas, the bloggers brought to me….The Best Way to Manage Money! And what is that, you ask?
Spend less than you earn. If you master that principle, you will be well on your way to financial freedom. Begin by making a list of all your expenses.
First think about your fixed expenses, the things that don’t change from month to month. Include things like
- Housing (rent or mortgage)
- Car Payments
- Insurance Payments
- Prescription medications that you take on a regular basis
Basically include everything you pay a fixed amount for. Don’t forget irregular payments like your auto insurance policy that you renew every six months.
Then make a list of other necessary expenses, the things you need to buy every month, but are a bit more variable in nature. Include
- Food
- Entertainment
- Gas for your car
- Birthdays and Christmas
Double check your list to make sure you’ve included every possible expense. For the items, like insurance, that you only pay every six months, divide the number into 12 equal monthly payments. For irregular expenses like Christmas, figure out what you typically spend and then divide that number by 12 months. At this point you should have a pretty good idea of what you need to spend every month.
Then take a look at your income. What do you bring in every month? If it’s more than your expenses, you’re in good shape, and you’re already spending less than you earn.
If your income is less than your expenses, you need to cut some things out of your budget. Perhaps you can trim the grocery bill. Maybe it’s time to get rid of cable T.V. Do whatever you have to do to bring the amount of your expenses below your income.
If there’s no way you can bring your expenses below your income, it’s time to look at raising your income. Can you sell some stuff on eBay to pay off the credit cards? Do a little freelance work to make the budget stretch? Get creative. I know it’s not easy, and I’ve definitely been there. I am there now, actually.
In the last few months, since my husband lost his job as an advertising sales manager, he’s done janitorial work at night, freelance copywriting, board operation for a radio station, and work at a call center for Harry & David. It hasn’t been a lot of fun at times, but we’ve managed to avoid touching what’s left of our savings.
If you put your mind to it, most of the time you can find a way to spend less than you earn. And if you honestly can’t, then it’s time to accept some help until you can get back on your feet.
For more 12 Days of Christmas, visit:
- Day 2 - Two Guaranteed Ways to Financial Freedom - Credit Withdrawal
- Day 3 - Three Paid Credit Cards -DebtFREE-Revolution
- Day 4 - 4 Calling Tips - Plonkee Money
- Day 5 - 5 Golden Rules of Snowflaking - I’ve Paid for This Twice Already…
- Day 6 - 6 Streams of Income - Moolanomy
- Day 7 - 7 Tips When You’re Swimming (in debt) - Working for Financial Freedom
- Day 8 - 8 Maids a Milking - rocket finance
- Day 9 - 9 Financial Lessons - Cash Money Life
- Day 10 - 10 Creative Ways to Cut Up Your Credit Card -Gather Little by Little
- Day 11 - 11 Ways to Get paid (…for Pipers…) - Mrs. Micah
Photo by Jeff Keen.
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December 10th, 2007 at 3:27 am
So you’re suggesting that we should make a list and check it twice?
Good start! This should be fun.
December 10th, 2007 at 3:31 am
Great start to the 12 Days of Christmas - Personal Finance Style! I’m looking forward to the rest of the articles!
December 10th, 2007 at 7:03 am
I love that picture
great post!
December 10th, 2007 at 7:55 am
Yep, start making your lists!
And when I found that picture, I knew it was *THE* perfect one for this post! lol
December 10th, 2007 at 9:15 am
It has taken us a long time to create our budget. One trick I have found is that you have to change your budget to meet your changing needs. There are months or years where more money has to be directed into another area, and taken from others at times. I end up overspending when I don’t realize that we’ve been driving less, but that our heating bills have gone up. When I make a note to move the money from the gas budget to the heating budget, I don’t spend money twice by accident.
Great tips!
December 10th, 2007 at 10:58 am
I’m drafting up my 2008 budget at the moment, thanks for the tips!
December 10th, 2007 at 11:38 am
2008 is hopefully the year that I stick to tracking my money and following a budget, so I’m really looking forward to these articles. And I am taking your advice - already making my list.
December 17th, 2007 at 3:06 am
That’s cool stuff indeed! Yes, we do need to keep a track of our daily expenses - the debts towards which we make monthly payments, and expenses other than these. And maintaining a budget is really important.
I agree with you when you say one can make some money by selling stuff at eBay or do some kind of freelance work - I think it’s fine as long as you are earning ethically. But it’s important that you spend as much as is required or I should say, spend less than you earn. What I mean is, one should move according to a well-planned budget and follow some tips that can help him stay frugal during the Christmas season. Here’s a list of 51 tips and more to keep your frugal and fine during Christmas:
http://www.mortgagefit.com/bud.....stmas.html
http://www.smartmoneytips.com/holiday-budget.php
Merry Christmas in advance!
December 28th, 2007 at 8:49 pm
Your photo inspired my own blog post–I totally dig it. (Yes, I tracked back.)
“10 Ways to Have Fun NOT Spending Money”
http://shauna26.wordpress.com/
Cheers!
December 28th, 2007 at 9:04 pm
@Shauna - Glad I could inspire. Rather, glad the person who took the photo could inspire! Off to check out your post!