Steps to Stop Financial Bleeding

 
This past weekend at Fellowship Church we talked about some simple steps to help us stop the bleeding of our finances.  Nothing here is rocket science.  It's just plain old common sense - you know that stuff that we never pay any mind too but always seems to work when we need it.  Here is a summary of some steps you can take to put more money in your bank account at the end of the month that doesn't require getting a second job.

1.  CLEAN THE WOUND - TAKE AN ACCOUNT

The first thing you do when you discover a wound that is bleeding is you clean it.  You do this to stop any infection that may be trying to set in.  This action also allows for the wound to heal without any foreign germs or objects that could hamper the healing process.

In the same way, if you are going to stop the bleeding of your finances, you have to start by taking an account of where your money is going.  This means writing down on paper all of you income and all of your expenses.  Begin taking account for every dollar you spend.  Keep your receipts - all of them - and then group them after a month into corresponding piles - Food, Eating Out, Auto, Fuel, Gas, Electric, etc.

For best results, use a program like Quicken or MS Money.  These can link to your bank account via the internet and download your transactions automatically. You then go through the process of assigning categories to all of your expenses. 

This action shows you how much money you are spending in a specific area.  Most people who don't do this have little to no idea where their money is going - thus the bleeding effect is in full swing.

2.  DETERMINE TREATMENT - SET UP A BUDGET

Once a wound is cleaned, treatment begins in order to help the body heal itself.  This is one of the miracles of the human body - it's ability to heal itself.  But that is not the case with our finances.  Since our finances have no mind of their own the finances themselves are not the real problem.  It's those whose spend the money and make decisions about the money that have to be helped.

A budget is the single most effective way of helping a person change their spending habits.  A budget is simply where we get to tell our money where it is going to go before it can tell us where it's going to go.  The idea here is to take the information from the Account step and plug in the totals into a budget.  Several ideas need to come into play here. 

First, you should shoot to bring all your back bills current.  Slash extra spending where you can apply those funds to the bills you are behind in.  Second, don't jump on the credit cards until you are current in all your bills.  Third, create a debt snowball where you list your debts in order from smallest to largest with their assigned minimum monthly statements.  Take some of the funds you used to bring all bills current and add it to the minimum payment on the smallest debt.  Continue paying this until the note is paid off.  Then take the same total amount you were spending and add it to the second bill until it is paid off.  Then add the amounts you used on the second bill to the third.  Continue in this manner till all your credit cards are paid off.

3.  COMMIT TO EXTENDED MAINTENANCE - REGULAR CHECK-UPS

Serious wounds can often require extended maintenance through various different methods.  Some may have  physical therapy involved.   Others may have medications that they have to take on an ongoing basis.

The area of financial bleeding also requires on going maintenance.  Regular check ups on your spending and comparing them to your budget are necessary to insure that you do not again fall into the trap of owing more than you earn.

A good thought from a great mentor in my life is this...

"When your outflow exceeds your inflow you are sure to implode."

Check out the Financial Tools section of the Fellowship Church website for forms that you can use to help stop the bleeding in your finances.

Comments

[Milago Condos Austin]

Some may have physical therapy involved. Others may have medications that they have to take on an ongoing basis.

[Brazos Lofts]

It's those whose spend the money and make decisions about the money that have to be helped.

[cna classes]

the finances themselves are not the real problem. It's those whose spend the money and make decisions about the money that have to be helped.

[credit cards]

you how much money you are spending in a specific area. Most people who don't do this have little to no idea where their money is going - thus the bleeding effect is in full swing.