A few months ago I read the book
First Steps To Wealth by best selling author
Dani Johnson. Love every single chapter. My favorite chapters are 8 & 9. In this Chapters Dani Johnson talks about money. How are you spending your money? Where is it going?
On Chapter 9 she keeps the focus on DEBT. She gives you 7 steps on how to eliminate your debt.
1. LIST YOUR INCOME
2. FIND OUT HOW MUCH YOU KEPT
3. FIND OUT WHERE IT WENT
4. CUT THE FAT- the excessive money you spend on foolish things
In step 4, Dani Johnson recommends the use of highlighters. Take your bank statement and highlight your expenses.
Yellow-Food
Pink- debt payments
Purple- Necessities- rent, utilities, water
Orange- Everything else is your fat (things that are not a necessity)
STEP 5- PAY OFF YOUR CREDIT CARDS, CAR LOANS, AND MORTGAGE
STEP 6- CREATE A FUN BUDGET, SAVE FOR FUN ACTIVITIES
STEP 7- GIVE, DONATE TO CHARITIES
I went through each step from 1 to 5. I realized that I was spending under 3k in bills and credit card payments. However, I was not saving much. Where was the rest of the money? Probably spent in cash purchases. I set a budget with the current expenses. Allotted only 3k to pay bills and credit payments due monthly. The rest would be saved and used to pay other needs. Recommended to pay Groceries and Car Expenses with Cash.
I keep all my Finacial Information in this Red binder. With a section for Information on articles that Dave Ramsey has written to help me review often.
A section for Tracking monthly expenses. Budget
A section for Bank statements
A section to keep track of Debts
And last a section for website information to each payee, user names and passwords.
I also included a pencil zipper pouch for holding pens, stamps and mini calculator.
BUDGET BINDER
BUDGET AND CURRENT MONTH'S EXPENSES
I have an Excel worksheet saved in my computer with the monthly bills, Automatic payments, and credit card balances and payments. Each month I input the information for those variable amounts on certain bills. The water bill gets paid every four months and the waste management gets paid every three months. That's the money that I use to pay off credit cards or transfer into savings.
I learned from Dave Ramsey that you should pay off your smaller debts first and continue to pay the minimum on the higher balances. So far I have paid off 3 credit cards. I have one left under $500. That one would be paid off soon. Thanks to this new way of keeping track of my expenses and being disciplined to not use the money for other expenses.
I strongly recommend you to read
Dave Ramsey's book TOTAL MONEY MAKEOVER. This two books have helped me two understand, how to take control of money instead of letting money control me.
Do you have a budget binder? Or how do you keep on track with your budget and bill payments? Please share any of your ideas in the comments section.
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