Provident Living

Now, as some people (but not most people) know, the key to fixing your finances is to start at the ground up. A lot of people are afraid of the "B-word" . . . "budget". But, it's not scary and it's not a ball and chain tying you down and stopping you from enjoying life. In fact, it's just the opposite. It gives you the freedom to continue your standard of life even in the midst of economic uncertainty. A financial reserve is more than just a cushion; it's a life preserver, in that, if your situation turns south, it preserves your quality of life. It's a safe harbor from worries, and a goal to work toward.

Enough philosophizing. Let's get down to the nitty gritty. How? Well, that's simple. At least, it's a simple concept, which we all know are the most difficult to practice. It starts with living within your means. We've all heard that a million times before, and it's as ingrained in us as looking both ways before we cross the street, which is good and bad. Good that we know the rule inside and out. Bad that we've become desensitized to what it really means. So I am going to redefine the term. "Living within your means" means more than just not spending money you don't have. It also means planning for contingencies. As I was saying above, it means having a financial reserve. But, for some of us who live paycheck to paycheck, a financial reserve sounds like an absurd dream. Struggling to make ends meet causes unnecessary stress and worry, which can actually effect your physical health.

So, how do we do it? Well, here's where we start. For one week, keep track of everything cent you spend. If you buy a soda out of the machine at work, write it down. If you buy a treat at the store on the way home, write it down. Track everything. And, at the end of the week, look over your record and split your expenditures into two different columns, "Necessary" and "Unnecessary". At the top of the paper write how much income you bring in and then do the math. How much of that are you spending on unnecessary items? Is there any room to trim the fat? I think you'll be shocked at how many pennies here and nickels there go to things you don't even really want. That's not to say that budgeting some money for fun isn't a necessity because it is, but we'll get to that next week. For now, stay tuned, and as always, send your financial questions to financialfixutah@gmail.com.