Defrazzle Your Finances

 I'm living so far beyond my income that we may almost be said to be living apart.

e.e. cummings

Money. You can't live with it, you can't live without it. No matter how hard you try, there's never enough. The only thing increasing in your bank account is your debt, and you're beyond understanding how to make ends meet. Is that how you feel?

Well, there's no need. Getting on an even footing with finances is hard, but not impossible, when you take small steps. You didn't get there overnight; you won't get out of it overnight. It doesn't have to be painful – in fact, you'll be more successful if you make a game of it.

Here's how to get started: figure out, approximately, how much you spend in a week on “incidentals” - coffee, a magazine, new cosmetics, etc. Just keep your sales slips for in your purse and add them up at the end of the week. This is not grocery money, car payments, etc.; this is just incidentals – things that you can live without if you’re desperate!

When you have that amount – say it's $30.00 – take that much out of the bank the following week, and see how much you can have left over at the end of the week. Use ONLY CASH on those incidentals. Whatever is left over goes in an envelope somewhere where you won't spend it.

After a month, see how much you have in your envelope. If it's $20.00, that's yours to spend on yourself as a reward.

Now, take that amount ($20.00), divide it by four ($5.00), and subtract that amount from what you've been spending weekly ($30.00-$5.00= $25.00). Now, start again with the reduced amount.

Once you've gotten to the place where this is getting really uncomfortable, stop, move back to the lowest comfortable figure and stick with that budget. Take half of what's left over from your original spending total (in this case, $30.00/2=$15.00), and apply that to your debt each and every month like clockwork – make it an automatic payment from your account every month – even if it's just two dollars. The rest (in this case the other $15.00) goes in a savings account – also paid automatically. You can then apply the same principle to groceries, or gas, or any other expense that is variable and see how far you can comfortably cut back.

This enables you to save without that “scarcity” mentality that makes you poor in the first place. Because it's a game and because you're trying to see how much you have left over at the end of the month your mindset is not “I can't afford that” (scarcity) but it's now “I could buy that, but I'd rather see how much I can save!” (abundance).

There are great resources out there to help you move even farther ahead. Wonderful programs like “Mvelopes” or Mary Hunt’s “Debt-Proof Living” e-zine. The trick, however, is to always start small, and move forward slowly, building habits as you go.

Happy spending!

Darlene Hull

 Darlene Hull

More Articles 

Credit Card Hazards That Can Cripple Your Finances - Dave Robinson
You are pre-approved! Every time I check my mail there is at least one or two pre-approved credit card applications. You get them too, I'm sure. You can even have terrible credit and they still continue to flood your mailbox. And if you just...

Refinance Home Loan - What You Must Know Today - Bill Smith
Many banks compete to give you a refinance on your home loan. Some of the popular web sites will give you multiple quotes from different lenders. However, you need to be very careful about the home loan you choose. Since the prices of real estate...

Using Equity to Finance Home Repairs - John Mussi
A home equity loan allows you as a homeowner to get a loan by using the equity in your home as your collateral. The equity here consists of whatever funds you have invested in your property in order to own it or improve it. Since it is a...

Men, Women and Their Finances - Joseph Kenny
What do you worry about most when it comes to your finances and debt or your credit card repayments? It seems that men and women have different outlooks and think differently about their finances. A survey was carried out to see whether men and...

Getting Business Finance - Alan Luong
Surprisingly, despite current trade, there are still large numbers of people who are setting up in business. Proof perhaps that the well ingrained entrepreneurial instincts of the American people live on. However, you might think that with...

Debt Counselling – Healing Touch For The Ailing Finances - Aditya Thakur
The financial stories remain similar over the months and the years. With debts becoming a nuisance, people make resolutions and resolve to stand by these resolutions. But, once on a spending spree, little do they care for the resolutions that they...

Refinancing 2nd Mortgage - Why Research Refinance Rates - Carrie Reeder
Refinancing a second mortgage can reduce your monthly payments and interest rates. To get the best deal, you need to research rates. With a minimum amount of time invested, you can have peace of mind, knowing you are getting the best...

Mortgage Brokers For Home Loan Refinance - Refinance Online - Carrie Reeder
Online brokers negotiate financing deals with several lenders. This may mean that you can find a better deal through their site than by working with the lender. Not all mortgage brokers guarantee the lowest refinancing rates, so you should...

Bad Credit Mortgage Refinancing - Refinance And Improve Credit - Carrie Reeder
Many homeowners have a goal of improving their credit. Despite efforts to maintain a good credit rating, situations arise that can have a damaging affect on our credit. A common problem involves acquiring too much debt. In this case, some...

Finance is for Everyone - James Monahan
Money makes the world go round, as they say, and while the whole world is full of those crisp or wilted paper bills it seems that they like to slip right through our hands so quickly. People who know how to make a dollar or two with ease...

Personal Finance - Terje Ellingsen
Personal finance is not an issue you should be forced to face when in a crisis like so many people end up doing. Your personal finances are vital for your life, security and prosperity. Face it and don't hide your financial issues under the rug....

Refinance Mortgage: Smart Move For Home Buyers - Jenny Lane
There are several reasons why a refinance mortgage might just be the right option for you. Getting a refinance mortgage is a smart move for any home buyer. With refinance mortgage, not only do you lower down your interest rates but you also reduce...