Starting From Square One

You’re living paycheck to paycheck, you have zero dollars to your name, and you and credit cards aren’t on the best of terms.  You’d like to save more for retirement.  You’d love to save for a house.  You wish you could spend more on gifts during the holidays without feeling guilty in January.  Someone has set the financial treadmill to mosey and you don’t feel like you’re getting anywhere.  How do you get off the treadmill and start going places?

The good news is, you’re on the right track.  The first step to solving a problem is realizing there is actually a problem in the first place.  The second step is understanding the scope of the problem – how big is it, really?  And to understand where you are financially, you have to create a budget.

I’ve written about Brewing Up a Basic Budget before.  Basically you’re putting all your income and expenses for the month in writing.  Once you’ve poured your financial life out on a spreadsheet (or on low-tech paper), you’ll be able to see things you may not have otherwise noticed.  Maybe you’re spending $100 per month on Starbucks, $300 on going out to eat, or $400 on impulse buys from Target.

Creating your first budget is not about fixing anything, it’s about identifying where your paycheck is going every month.

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