That is a great question!
The person who posed this question to me several years ago was asking how to get their finances in order after having had their ‘enough moment’ …
1) Take a deep breath & relax. As stressed as this all may seem, we’re going to slowly get ourselves through the process one step at a time.
2) Get some paper and a pen in order to gather info – if you have a bank account (or multiple), list them out and include their balances. If a transaction is pending, subtract it from the balance. Next, list out all lines of credit or installment plans – gather those balances (including pending charges) as well as the minimum payments due and the interest rate.
3) If you have them, find the receipts from your last few trips to the grocery store and gas station – if not, did you use a credit or debit card? Find the totals of what you spent buying food and gas (or other means of transportation if you don’t drive).
4) List out your utility bills (electric, gas, water/sewer/trash, cell phone or landline, internet) – most of us do online bill pay, so we can pull the last several months (or more) of bills. Note the totals and the usage amounts. You’ll want to pull as much info as you can in order to figure out the seasonal differences in fluctuations and decreases as well as utility rate increases.
5) Pay for other services, such as online streaming (TV/movies/music/video games), subscriptions (services, boxes, and more), and other reoccurring expenses (insurance premiums, regular maintenance, oil changes, car registration, membership dues, storage unit rentals, haircuts/salon visits)? List them all out.
6) Now that you have all these numbers, total them up!
7) Total up your monthly income (personal or household, whichever applies in your case). Is it more or less than the amount you’re spending in a month? Hopefully, it’s more than what’s flowing out!
8) Have more bills than income? Now we start cutting. Start eliminating the non-essentials … basically anything absolutely not necessary (necessary = food, transportation expenses (gas, oil, car payment, transit passes), utilities (brainstorm how to reduce these!), housing, and insurance. Cut cut cut until it balances!
