Avoiding Edmonton Bankruptcy: Budgeting for Financial Health
A budget is essential for financial health. It helps track how much money you have coming and going each month, making it easier to plan ahead, save, and avoid financial disasters like missed payments or filing an Edmonton bankruptcy.
If you have struggled to make and live by a budget, you are not alone. Most of us have tried and tried again to find a budgeting method that we can really live with. By combining two of the simplest, easy-to-use budgeting methods, organizing your personal finances may finally be within your grasp. By blending old school simplicity and high tech efficiency, your money will be easy to manage.
The Envelope System of Money Management
The system of putting money budgeted for certain items into envelopes is as old as money itself. It’s simple, it’s easy, and it works. Here’s how:
- List all of your bills
- Mark your calendar, highlighting due dates
- Label envelopes with individual expenses such as food, gas, or cable bill
- On payday, divide cash between envelopes according to your budget
If, for example, you are using the envelope method to control grocery spending, nothing could be easier because when the envelope is empty, that’s it.
High Tech Ease Keeps you Current
There is nothing easier than online bill payment. Set it up and you never have to worry about late payments again. You do, however, need to ensure that money budgeted to pay the bills is there when the bill comes due. You can set up bill payments through your bank or by contacting individual payee; many allow you to set up payments online. Most mortgage holders, utility, and cable companies are able to set up an automatic draft from your checking account, making your payment of monthly bills simple and streamlined.
Online bill and automatic draft payment s also eliminates costly late fees. Most payees send a bill out before they deduct your payment, allowing you time to prepare for the deduction. You may also stop or adjust payment amounts.
Combining Old and New
By combining the envelope system with online bill pay, you can quickly gain control of your personal finances. Pay your housing, utility, and consumer debt with automatic drafts. Pay for groceries, gasoline, personal items, and entertainment with cash you have deposited in envelopes. Credit cards and debit card are no longer a temptation using this system.
A Realistic Budget is the Best Foundation
Of course, no budgeting system will work unless you have developed a realistic budget that balances. Developing a workable budget is a bit of work, but it is worth every effort you make. Start by listing all of the money you have coming in weekly, monthly, and yearly. These are your “ins”.
Next, list every bill you pay. Think about this list for a few days. Chances are you have forgotten expenses occurring irregularly or annually. Add all these items together; these are your “outs”.
Subtract your “outs” from your “ins”. The remaining funds can be used to meet your financial goals. No remaining funds? Examine your outs carefully, making cuts until you balance.
Now is the perfect time to gain control of your finances by creating a personal financial plan.
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