Day 1 is upon us, and I’m excited for your journey.
After the next 7 days of effort and determination, we will have the Principles and strategies that will allow you to gain control over your Finances again and even work towards bigger Financial Goals like one day being Financial Free.
Grab your Workbook and a Pen and let’s get started.
Financial Fact Number 1 – You need to know what is coming in and what is going out your Accounts exactly
Time to complete – approximately 1-2 hours
We need to start keeping a budget and track of our Household Incomes and Spending – there is no way around this if we want to then use our money to achieve our Financial Goals.
If you don’t know where you are right now, you don’t know where you can end up.
// Create your Total Household Spending Budget
Open up your Bank accounts and credit cards and list all your Incomes (including Benefits/Tax Credits/Child support etc) and do the same with everything you spent (Outgoings) in the past month at least.
If you live on a monthly pay check, look over the past three months of Bills and spending and take the average amounts.
So if you spend £40 a week roughly on food, write down £160 as an average monthly food cost.
Do this with everything you have spent money on from your account, even the fun items that you probably shouldn’t have purchased.
// Add in those Yearly Bills as a Monthly Cost
Next, write down or track back in your account for those larger Once and Year or every few month household bills such as Car Insurance, Home Insurance, Birthdays and Christmas.
We need to start putting aside a little money every paycheck to cover the larger yearly events and bills so that you don’t get caught out and get into Debt. Christmas does come once a year, so no need to put it all on Credit Cards each December to then pay off all year long with interest.
// Separate into Spending Categories
Categorize all your Spending now into Truly Essentials (keeping the lights on, roof over your head, food on the table etc), Debt Repayments (Monthly Credit card payments, Car payments, Rent, Mortgage), Future Financial Goals (Savings/Investments/Pensions etc) and Non-Essentials (if you really had to could you live without it if you absolutely had no choice).
Think Sky TV, Gym memberships, magazines, Take-Aways etc for those items that could be given up if you lost your job and had no choice but to strip back.
Ideally if you can put all of this into a spreadsheet, that would help you in the long run check and review your budget spending in future months.
If you don’t have one, paper and a pen is fine, but you can pick up a copy of my own Household AutoPilot Money Spreadsheet here as it will prove very useful in the later days ahead.
Budget done? Hell yes!